On Thursday 11 December, the European Parliament’s Subcommittee on Tax Matters (FISC) discussed with a number of experts the potential taxation of wealthy individuals and its consequences for the EU economy.
Regina Doherty (EPP, Irish) and Gilles Boyer (Renew Europe, French) voiced their concerns about the risks to the EU’s competitiveness that such a tax would entail.
Gabriel Zucman, Director of the European Tax Observatory, pointed out that his proposal is not a tax on companies, but on individuals who own more than €100 million in assets (see EUROPE 13440/19). “So this does not affect investment, it will not change the country’s attractiveness for foreign investment. It’s neutral”, he defended. “It would enhance the attractiveness of the European Union to have such a tax, because with the revenue that could be collected from these under-taxed ultra-high net worth individuals, we could invest in what is the key driver of prosperity, attractiveness, competitiveness, which is higher education, education at large, research, public infrastructure”.
Kurt Van Dender, Head of the Tax Policy and Statistics Division at the OECD’s Centre for Tax Policy and Administration, believes that the tax system as a whole needs to be examined. “It is possible to envisage a reform aimed in particular at increasing progressiveness while maintaining growth and investment incentives”, he argued. “Simplicity and certainty are the key words here”.
Faced with the risk of mobility of wealthy individuals, they have both defended mechanisms such as the exit tax, modelled on the US FATCA law (see EUROPE 13686/18).
Benjamin Angel, Director of Direct Taxation, Tax Coordination, Economic Analysis and Evaluation at the European Commission’s DG TAXUD, spoke of the immense risk of mobility within the EU, due to the regimes of certain Member States trying to attract large fortunes.
He also stressed the need for legislation to regulate tax advisers: “If we discipline those who have the ability and knowledge to build these aggressive tax optimisation structures, we can also contribute to the reduction of these practices”. (Original version in French by Anne Damiani)