On Thursday 21 November, members of the European Parliament’s Subcommittee on Tax Matters (FISC) discussed the future of European and international tax policies with representatives of the United Nations (UN) and the European Commission. The UN representatives felt that the current tax reforms do not sufficiently include certain regions of the world.
“You will not disagree with me if I say that the needs in African countries are not exactly the same as the needs in Europe or in North America or in South America, but what we have currently is discussing issues only from the perspective of a few sections of the world”, lamented Sanya Gbonjubola, co-chair of the United Nations tax committee (see EUROPE 13279/26).
Asked by Matthias Ecke (S&D, German) about the best way forward, he stressed that a unanimous agreement on taxation remains virtually impossible, as many fundamental tax issues are not universal. He argued in favour of solutions in cluster: “It means (...) looking at each region’s particular problems and providing solutions (...) in the collaborative way”.
Nevertheless, he agreed with the need for international agreement on issues that go beyond a single country, but retorted that the approach to implementation cannot be a “big bang” for everyone. “Everyone is not on the same level of development, the same level of access to infrastructure and resources”, he explained.
The speakers focused in particular on international tax reform for large companies. In his introductory speech, Benjamin Angel, Director for Direct Taxation, Tax Coordination, Economic Analysis and Evaluation at the European Commission’s DG TAXUD, pointed out that more and more countries are implementing Pillar II, which establishes a minimum tax of 15% on multinationals. Countries are opting either for full implementation or for a qualified minimum complement (see EUROPE 13493/21).
As far as Pillar I on the taxation of digital giants is concerned, the convention has been ready for a long time and nothing has been discussed on this subject. “The United States, in particular, have conditioned their support to the convention to agreement on amount B for a number of reasons”, explained Mr Angel. Amount B consists of a simplification of the methods for determining the profits attributable to the activities carried out by certain local marketing subsidiaries. “We don’t know when this agreement will be reached”, he added. India is also discussing this issue.
Kana Liselott, co-chair of the United Nations tax committee, points out that the first pillar would be “by far the best solution from a technical point of view”. However, if it is not implemented, it is essential to look for other solutions for the digital economy and the UN could be a forum for this solution. (Original version in French by Anne Damiani)