Monday

24th Sep 2018

Spain pushes for taxation debate at EU summit

  • Rajoy wants a "new code of good practice" when it comes to tax matters (Photo: .michael.newman.)

It was supposed to be all about investments and Russia, but the issue of tax avoidance is likely to creep onto the EU summit agenda on Thursday (18 December).

In the draft summit conclusions circulated among EU ambassadors on Wednesday, there is one paragraph mentioning the "urgent need to advance efforts in the fight against tax avoidance and aggressive tax planning, both at the global and EU levels."

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EU leaders will "look forward" to the European Commission's proposal on an automatic exchange of information on tax rulings and get back to the taxation issue in June 2015.

The tax reference has been pushed by Spain, according to a letter from the Spanish prime minister Mariano Rajoy dated 16 December and seen by EUobserver.

Rajoy wrote to EU Council chief Donald Tusk to "express [his] interest in taxation issues being given a central position in forthcoming European Council meetings."

"We all share great concern for the lack of transparency regarding administrative decisions that enable aggressive tax planning and contradict the principles of equity and alignment of taxation with economic activity and the creation of wealth," he said.

One of his suggestions is the introduction of a "European tax identification number, which will make it easier to identify taxpayers who perform cross-border transactions."

Also, that member states adhere to a "new code of good practice" which would prevent them from doing tax dumping at the detriment of other member states.

"The EU has to show its ambition. It is what its citizens - given the tax efforts demanded of them - deserve. The upcoming Ecofin and European Council meetings present an opportunity to express these goals clearly and collectively," Rajoy noted.

National diplomats on Wednesday were not expecting a big debate on the matter, but admitted that the public mood has shifted in favour of more tax transparency and harmonisation following LuxLeaks, the scandal surrounding Luxembourg's sweetheart deals with big corporations.

But Luxembourg - at the time led by the current EU commission chief Jean-Claude Juncker - is not the only country using such "tax rulings".

On Wednesday, EU competition commissioner Margrethe Vestager demanded information from all 28 member states about their tax ruling practice and to list all companies that have received such tax rulings from 2010 to 2013.

"We need a full picture of the tax rulings practices in the EU to identify if and where competition in the single market is being distorted through selective tax advantages", she said in a press statement.

"We will use the information received in today's enquiry as well as the knowledge gained from our ongoing investigations to combat tax avoidance and fight for fair tax competition".

Juncker seeks to bypass vetoes on tax reform

EU commission chief Juncker has indicated he will try to bypass member states’ veto powers over fiscal issues when he proposes new laws to clamp down on tax avoidance.

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