EN Official Journal of the European Union CE 33/3

(2004/C 33 E/003)

WRITTEN QUESTION E-1638/02

by Bart Staes (Verts/ALE) to the Commission

(10 June 2002)

Subject: Position of Commissioner Busquin on tax competition in the European single market

On 18 May 2002 in the newspaper De Morgen the European Commissioner for research policy, Philippe Busquin, was reported as stating that he is in fundamental disagreement with his colleague Commissioner Bolkestein. He blames Bolkestein for encouraging the Member States to compete against one another in the area of taxation and is quoted as saying ‘Should we drive up fiscal competition within the European internal market? Mr Bolkestein (internal market) is in favour of this. I must make it quite clear that I am against it. It is time that we had a serious discussion of the issue.’

In the meantime has Commissioner Busquin officially informed his fellow commissioners of his dissatisfaction with Mr Bolkestein's policy and has he now urged his colleagues in the Commission to debate the issue?

If not, when will Commissioner Busquin officially notify the Commission of his views?

If so, how did the Commission react to the proposal for a thorough debate?

Can Commissioner Busquin once again explain why he disagrees with Mr Bolkestein's approach. If not, how are we to interpret the interview published in De Morgen?

Answer given by Mr Bolkestein on behalf of the Commission

(18 July 2002)

The Commission's position on Union taxation policy is set out in its Communication ‘Tax policy in the European Union — priorities for the years ahead’ (1). This Communication is very comprehensive and identifies several levels of actions and priorities for the coming years. It is the result of a debate within the Commission on the role of fiscal policy and fiscal measures.

Tax competition is addressed in this Communication and more particularly in Section 2.3 which states that the EU tax policy ‘must, as a priority, serve the interests of citizens and business wishing to avail themselves of the four freedoms of the Internal Market (the free movement of persons, goods and capital, and the freedom to provide services). It must, therefore, focus on the removal of tax obstacles to the exercise of those four freedoms. Moreover, to the extent that tax systems are used as a tool for allocation, redistribution, and stabilisation objectives, the tax consequences must be clear to the intended economic agents. For both these reasons, tax systems must be made simpler and more transparent. In this context it is important to recognise that, while harmful tax competition must be addressed both at EU level and at the broader international level, notably within the OECD, and the State aid provisions of the Treaty must be respected, some degree of tax competition within the EU may be inevitable and may contribute to lower tax pressure.’

In this Communication it is also recognised that tax policy cannot be designed in isolation but should be coherent and underpinning other Union policy objectives and in particular support the modernisation of the so-called European social model. In this context, it is also up to the Council of Ministers to decide which actions to take up as a priority. And, as the Communication also makes clear, it remains the Commission's view that a move to qualified majority voting at least for some tax issues is indispensable.

Accordingly, the statements made on the subject of tax competition in the article in De Morgen are fully in line with the Communication adopted by the Commission. But it needs to be realised that this Communication contains several levels of actions for the short, medium and long term.

(1) COM(2001)260.