WRITTEN QUESTION P-0028/02

by Joost Lagendijk (Verts/ALE) to the Commission

(15 January 2002)

Subject: Comments by Commissioner Bolkestein on tax harmonisation

In a television interview on Sunday, 6 January 2002, Commissioner Bolkestein let fall the remark that he saw little prospect of harmonisation of tax rates being achieved within the European Union. Mr Bolkestein emphasised that he strongly advocated reducing differences in excise duties and VAT rates to a minimum. However, he anticipated that attempts to do so would fail in the face of the requirement for decisions to be taken unanimously. With 15 Member States, it would be difficult to reach agreement; with perhaps 25 Member States he expected that it would be almost impossible.

The Commissioner is perhaps failing to fully recognise the possibilities offered by the instrument of enhanced cooperation. This solution undeniably has its weak points. For example, it will be a less attractive alternative for Member States taking part, given the apparent freedom which the arrangements would mean for countries not taking part. However, provided that the group not included in the arrangements is very small, such a solution can nonetheless be expected to bring satisfactory results, an argument which is being put forward by a number of Member States in support of using the instrument of enhanced cooperation for decisions on the eco tax.

The Commission:

- Has it finally abandoned its plan to reduce the various differences in taxes between EU Member States to a minimum in the interests of making the operation of the internal market more effective?

- Has it considered opting to pursue the alternative approach whereby decisions would be taken using the instrument of enhanced cooperation by a group of Member States willing to take the lead (as many have advocated in connection with the introduction of the eco tax)? If not, why not?

- Does it have other alternatives for reaching a decision on reducing tax differences between European Member States to a minimum, and, if so, what are those alternatives?

Answer given by Mr Bolkestein on behalf of the Commission

(8 February 2002)

The Commission's Communication, Tax Policy in the European Union Priorities for the years ahead(1), adopted 28 May 2001, sets out its policy with respect to the areas where further tax harmonisation is necessary, and also on the use of enhanced cooperation and non-legislative instruments as a means of achieving Community tax policy objectives.

With regard to enhanced cooperation, the Communication states the following:

The possibilities introduced by the Amsterdam Treaty and developed by the Nice Treaty for closer co-operation between sub-groups of like-minded Member States could also be envisaged in certain cases. In particular, this could be used in tax policy areas where, even in the long term, decisions in the Council are taken by unanimity. These must be self-contained policy areas so that Member States cannot pick and choose between policies as best suits them. The decision at Nice will enable the Commission to propose to the Council that as small a group as eight Member States may co-operate

more closely, after approval within the Council by qualified majority. However, in line with the principles agreed at Nice, this approach must not, among other things, undermine the Internal Market, constitute a barrier to or a discrimination of trade, distort the conditions of competition, or affect the competences, rights and obligations of the non-participating Member States [].

As regards indirect taxation, the possibility of enhanced co-operation could provide a way forward in the area of environmental and energy taxation. A majority of Member States have indicated their strong desire to make progress in this area.

(1) OJ C 284, 10.10.2001.