Tuesday

14th Aug 2018

Commission opens debate on tax competition within EU

  • Aggressive tax planning has become an 'unbearable' problem for the EU, said commissioner Moscovici. It is believed to cost €50-€70bn in lost revenue (Photo: European Commission)

The European Commission opened up the debate on tax competition between member states on Wednesday (7 March), by asking seven countries to stop what they called "aggressive tax planning".

Tax policies in Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta and the Netherlands "have the potential to undermine fairness and the level playing in our internal market and increase the burden to EU taxpayers," tax commissioner Pierre Moscovici said at a press conference.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

He said that aggressive tax planning had become an "unbearable" problem in the EU and that is was "part of the imbalances that have to be reduced."

"We must ensure that fair taxation becomes the rule without exception, outside of the EU or inside the EU," he added.

Since a series of leaks on tax avoidance, the commission has stepped up the fight against tax havens outside the EU. In the meantime, pressure has increased to also put an end to practices within the EU. 

According to the commission, between €50bn and €70bn are lost each year because of profit-shifting within the EU.

In a text presenting the economic reports on EU countries published Wednesday, the EU executive said that "tax abuse can be reined in by strengthening national tax legislation, increasing transparency, and cooperation among governments."

It insists that member states, and the seven in particular, have to put the anti-tax avoidance directive (ATAD) into their national legislation.

"If you take an interest in Europe you have to think about it, we have to lead by example," Moscovici said, insisting that there is "still a lot to be done."

"It is very good news that the European Commission seems ready to finally tackle harmful tax competition inside the European Union," Oxfam said in a statement.

The NGO's deputy director for advocacy and campaigns, Marissa Rya, welcomed the "naming and shaming" strategy by the commission.



Sven Giegold, the Greens' spokesman for tax issues in the European Parliament, said that "it is great to see the European Commission finally acknowledge the role of EU countries in facilitating tax avoidance."

"The big offenders are not just distant tropical locations like Panama and Bermuda," he added.

Commissioner Moscovici however rejected the comparison.

"I maintain my view that there is no such thing as tax haven in the EU," he said.

He said that there were just "some regions of shade, others of light, there's a lot of different nuances," and that he did not want to "point fingers" at EU countries.

Bettel bites back

But the commissioner's position was already too much for Luxembourg's prime minister Xavier Bettel.

"I think the principle of the European Union is not to point out one country now against another," Bettel said.

He added that "it would have been more opportune and efficient to speak with the countries before and try to have an exchange on these different topics."

The commission's raising of the tax planning issue and the Moscovici-Bettel spat come ahead of the presentation by the commission, later this month, of a proposal to tax internet companies.



Luxembourg, along countries like Ireland and Malta, have been among the most vocal against the idea, which is pushed by countries like France and Germany.

The issue of tax transparency will be on the table of finance ministers at their meeting next Tuesday (13 March).

EU states loosen grip on tax havens

Finance ministers removed eight entities from the tax havens blacklist, while ruling out more transparency or sanctions - prompting criticism from tax-campaigning NGOs such as Oxfam.

EU and US kiss and make up on trade

The US will not impose tariffs on EU cars and might take back ones on steel and aluminium, according to a magical Trump-Juncker deal.

EU 'tax lady' hits Google with record fine

Margrethe Vestager has fined the US tech giant with €4.34bn for abusing its market dominance in mobile operating systems - but assured US president Donald Trump that it is not because she does not like America.

News in Brief

  1. Man held after car crashes into UK parliament security barrier
  2. Brexit delays better readability of medicines' instructions
  3. Masked youths set dozens of cars alight in Sweden
  4. Spain and Italy refuse new Aquarius-rescued migrants
  5. Bayer shares plunges after glyphosate cancer trial
  6. Merkel announces surprise visit by Putin
  7. Hungary to ban university gender study courses
  8. Support for Swedish Greens up over climate concerns

Opinion

Has the time finally come for 'European champions'?

Since Emmanuel Macron took the French presidency in 2017, the concept of consolidating European industries to create continental 'champions', capable of competing on a global scale, has been revived.

EU 'tax lady' hits Google with record fine

Margrethe Vestager has fined the US tech giant with €4.34bn for abusing its market dominance in mobile operating systems - but assured US president Donald Trump that it is not because she does not like America.

Stakeholders' Highlights

  1. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  2. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  3. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  4. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  5. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  6. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  7. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  8. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  9. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  10. Mission of China to the EUChina: Work Together for a Better Globalisation
  11. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  12. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma

Latest News

  1. Separation of powers instead of 'Spitzenkandidat' process
  2. Revealed: ExxonMobil's private dinner with Cyprus' top EU brass
  3. What Salvini teaches us about Operation Sophia
  4. 14 lobbyist meetings with Oettinger and Canete went unminuted
  5. UK poll suggests Brits would now vote Remain
  6. Some EU states face delays in 5G preparation
  7. Nordic and Baltic farmers urgently need EU support
  8. Migrant death rate spikes despite EU 'safety' priority

Stakeholders' Highlights

  1. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  2. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  3. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  4. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  5. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  6. FIFAGreen Stadiums at the 2018 Fifa World Cup
  7. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  8. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank
  9. FIFARecycling at the FIFA World Cup in Russia
  10. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  11. Centre Maurits Coppieters“Peace and Reconciliation Is a Process That Takes Decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  12. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up

Join EUobserver

Support quality EU news

Join us