As the European Commission prepares its tax simplification ‘omnibus’, due in June, European experts discussed how to reduce the administrative burden in this area at the EU Tax Symposium, organised by the European Commission and Parliament on Monday 16 March.
For Markus J. Beyrer, Director General of the BusinessEurope employers’ federation, and Tiina Tuomela, CFO of Swedish energy company Fortum, the regulatory burden is a burden for European companies and is holding back their competitiveness. “The tax system must be coherent, predictable, proportionate and as digital as possible”, said Mr Beyrer.
In his view, the main sources of complexity are the superimposition of rules, fragmentation between EU Member States and the accumulation of reporting frameworks. “Since automatic exchange, we have had to declare similar information, but at different times, from different authorities, from different angles”, he explained. He also regretted the lack of predictability. “If we could have a common platform between Member States, we could make significant savings for the competitiveness of the industry”, said Ms Tuomela. Ruth Kennedy, Commissioner of HM Revenue & Customs, sees digitalisation as an “opportunity” to simplify matters.
For her part, Ms Tuomela reported difficulties with anti-fraud legislation. “It is necessary to prevent tax abuse, but this should tackle the real tax abuse. The challenge lies in the fact that this costs everyone and brings an additional burden”, she stressed.
However, participants agreed on the need to preserve Member States’ tax revenues. Rasmus Andresen (Greens/EFA, German), MEP and member of the Subcommittee on Taxation (FISC), stressed the importance of “avoiding a race to the bottom”. “It’s clear that we need to simplify our tax system, but that doesn’t mean that we should lose a lot of revenues”, he said. Indeed, he reported that Member States lose €36 billion a year as a result of profit shifting. “The most sustainable tax revenues come from a system that supports growth, investment and innovation”, added the Director General of BusinessEurope. (Original version in French by Anne Damiani)