EUobserver takes a deep dive into the workings and new chairs of every single European Parliament committee for the new 2024-2029 session, in a series of articles first published in our print magazine of October 2024
In September, the EU won a legal battle against Apple, requiring the company to pay €13.1bn in back taxes to Ireland after a decade-long dispute.
“The Apple case highlighted the urgent need for an EU tax reform that addresses the impunity of major web and financial giants,” Pasquale Tridico, chair of the FISC committee told EUobserver.
Tridico pointed to three primary challenges ahead: harmonising taxes across member states with a common capital tax, fighting tax evasion with a comprehensive list of tax havens, and reducing the bureaucratic burden for businesses.
Annually, EU countries lose an estimated €35bn to €70bn in corporate taxes and €60 billion in value-added tax (VAT) revenue. Taxation falls under the responsibility of member states, meaning the European Parliament can only issue non-binding opinions on tax matters.
But because missed tax income has increasingly become a public problem, the subcommittee on tax matters (FISC) was established in 2020, and has become an important forum where EU tax reform is shaped.
Tridico acknowledged that tax reform is hard and would face tough opposition, particularly within the council of member states, as any changes to tax legislation require all member states to agree.
“Many member states oppose tax reforms that focus on equity and fiscal justice,” he said, noting that this resistance undermines citizens' trust in the system. “[But] we must shift the tax burden from labour income to the rents generated by new technology, artificial intelligence, and the web and finance giants.”
Tax reform can also help secure revenue for green and digital investments in Europe.
One of the most contentious proposals on the horizon is a minimum tax for the super-rich, put forward by economist Gabriel Zucman at the recent G20 summit in Brazil. The proceeds from this tax could be used to fund climate change initiatives and address global inequality.
"I believe this proposal is reasonable and timely, as it also aims to protect the middle class from the impacts of AI on the labour market," said Tridico.
A common corporate tax across the EU is central to preventing tax evasion and avoidance. And Tridico sees it as a way to simplify Europe’s tax code.
“Bureaucracy sometimes costs companies more than the taxes themselves. Decluttering is essential,” he said.
While much of the attention will be on closing tax loopholes, Tridico stressed that tax systems have to be prepared for technological disruption, shifting labour markets, and the need for more sustainable investment.
“We’ll hold hearings with economists and experts, engage in discussions with member states, and do everything we can to foster dialogue and advance the EU’s commitment to tax justice.”
The FISC coordinators are: Fernando Navarrete Rojas (EPP, Spain), Bruno Gonçalves (S&D, Portugal), Ondřej Kovařík (PfE, Czech Republic), Roberts Zīle (ECR, Latvia), Ľudovít Ódor (Renew, Slovakia), Rasmus Andresen (Greens/EFA, Denmark), Jussi Saramo (The Left, Finland), and René Aust (ESN, Germany).
Wester is a journalist from the Netherlands with a focus on the green economy. He joined EUobserver in September 2021. Previously he was editor-in-chief of Vice, Motherboard, a science-based website, and climate economy journalist for The Correspondent.
Wester is a journalist from the Netherlands with a focus on the green economy. He joined EUobserver in September 2021. Previously he was editor-in-chief of Vice, Motherboard, a science-based website, and climate economy journalist for The Correspondent.