Saturday

20th Jul 2019

EU commission eyes majority tax rules

  • The commission would identify areas where a majority decision-making would unclog the system (Photo: Ken Teegardin)

The European Commission will, next year, seek to identify tax areas where decision making could be moved to a qualified majority of member states instead of unanimity, in an effort to show voters ahead of the European elections that the EU is serious about tackling tax evasion.

In its 2019 work programme, unveiled on Tuesday (23 October), the EU executive named taxation as an area where it wanted "more efficient lawmaking", and identified topics "for a move to qualified majority voting".

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

"Enhance the use of qualified majority voting and allow more efficient decision-making in key fields of taxation and social policies, so that the EU single market legislation can keep pace with economic and societal developments," the programme said of the commission's goals.

The EU executive plans to roll out a non-binding 'communication' early next year on the issue before the European elections, which means there would be no time left for this commission to propose any real legislation on the issue.

The idea was already floated by EU commission president Jean-Claude Juncker in his state of the union speech in September.

"Europeans taking to the polls in May 2019 will not care that the commission made a proposal to make internet giants pay taxes where they create their profits - they want to see it happening for real. And they are right," he told MEPs at the time.

"I also think we should be able to decide on certain tax matters by qualified majority," he added.

The commission, earlier this year, pointed the finger at Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta, and the Netherlands, where it said sweetheart deals may have enabled multinational companies to cut their tax bills aggressively.

The finance and taxation commissioner, Pierre Moscovici, said, at the time, that tax rules in those seven countries "have the potential to undermine fairness and the level playing field in our internal market, and they increase the burden on EU taxpayers".

Some multinational companies have made extensive use of Ireland and other EU countries to shift profits and avoid taxes.

With this initiative, the commission aims for faster adoption of proposals. But it also wants to avoid proposals being taken hostage by one or a few member states which might block agreement on some areas.

It could also make it easier to avoid making exceptions for member states in certain proposals before they are adopted by unanimity.

However, there is little chance there would be anything tangible at the end of the process.

The commission pointed out that the treaty allows for a change in the decision-making process through so-called "clauses-passarelles".

According to this procedure, EU leaders have to notify national parliaments, which have six months to object, and if even just one EU parliament raises the red flag, the proposal is dead.

The European Parliament is also asked to consent by majority and then EU leaders adopt the decision by unanimity.

A German centre-right MEP, and a member of the parliament's economic committee, Markus Ferber, warned in a statement that the commission should tread carefully.

"Today, some small member states such as Ireland, Luxembourg or the Netherlands can protect their dodgy tax schemes by vetoing every decision in the Council - at the expense of all other member states. When it comes to closing tax loopholes and facilitating better cooperation between tax authorities, majority decisions can be useful to prevent the worst culprits from blocking everything," he said.

"However ... Brussels must not dictate [tax] rates by majority decision as this would be entirely incompatible with the budgetary rights of national parliaments," he added.

The issue goes to the heart of competences being divided between Brussels and member states.

However, as it is up to a unanimous decision of member states to do away with unanimity, it is unlikely to happen any time soon.

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 hesitates to back France over US tariff threat

France has passed a new tax on tech companies that will affect US global giants like Facebook. Donald Trump has threatened retaliatory tariffs over it. The EU commission says it will "coordinate closely with French" on the next steps.

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. EU goes on holiday as new UK PM arrives This WEEK
  2. Survey: Half of EU staff 'don't know' ethics rules
  3. Von der Leyen signals soft touch on migrants, rule of law
  4. Timmermans: von der Leyen will be tough on rule of law
  5. Timmermans trolls 'idiot' Brexit negotiators
  6. Rudderless Europe: Will real Germany please stand up?
  7. PiS & Fidesz claim credit for von der Leyen victory
  8. Von der Leyen faces gender battle for commission posts

Stakeholders' Highlights

  1. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  2. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  3. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  4. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  5. Nordic Council of MinistersNordic commitment to driving global gender equality
  6. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  7. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  8. Nordic Council of MinistersNordic talks on parental leave at the UN
  9. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  10. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  11. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  12. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership

Join EUobserver

Support quality EU news

Join us