Debate: Reforming the EU policy framework to stop tax avoidance in the EU after the OpenLux revelations
Date: WEDNESDAY, 10 MARCH 2021
Speaker: Ana Paula Zacarias
Language: EN

The challenges of European taxation constitutes one of our Presidency priorities, establishing a fair and efficient model of taxation, strengthening of good governance mechanisms, the global tax transparency, and to stepping up the fight against tax fraud, evasion and avoidance through non-cooperative jurisdiction are some of the areas where we want to advance. As you are aware, it was under the Portuguese Presidency that the dossier on the country-by-country report (CBCR) has advanced substantially in the Council.  Over the last few years, the Council has achieved a lot by extending the scope of administrative cooperation in taxation matters, most recently also to digital platforms. Tax rulings issued to companies will not be a secret any more. Tax authorities can now exchange information on country-by-country reports and potentially aggressive cross-border tax planning schemes. Administrative cooperation in the area of VAT is also taking a much higher level. In the context of enhanced transparency, it is also worth mentioning recent and planned improvements in the area of anti-money laundering framework, including on determining beneficial ownership, a key aspect of the OpenLux investigation. And, of course, there is the anti-tax avoidance directive, which provides a comprehensive framework of anti-abuse measures so that taxation occurs where value is created.  As regards the OpenLux specifically, allow me to underline some points. First, the EU has a set of clearly-defined competences in the Treaties where certain matters are left to national competence. This means that we have to look into what each of the other Member States is doing so that the sovereign right of one country doesn’t limit the sovereign right of the others.  Secondly, the Commission is doing what is necessary, either through legislative proposals through well-established procedures to ensure the full compliance of all Member States with EU law under equal conditions. We all have to act within the limits of our own competences. As far as the competences of the Council are concerned, the Presidency will continue to work on this matter, building on the political guidance of the Council conclusions on fair and effective taxation in times of recovery, on tax challenges linked to digitalisation and on tax good governance in the EU and beyond, which the Council approved last November.  These conclusions touched also on international cooperation, which is an element of the Parliament’s resolution on reforming the EU list of tax havens. Global cooperation is key to combating base erosion and profit-shifting. Allow me to cite two well-known examples.  First, the Code of Conduct Group. With the EU list of non-cooperative jurisdictions, Member States have contributed to changing a considerable number of harmful tax practices in third countries. Most of the more than 90 jurisdictions have aligned themselves with the standards common to the EU Member States, and this is in itself an achievement.  Member States have also achieved a lot in the area of intergovernmental corporate tax policy coordination within the EU. The EU conduct group examines existing laws, establishes practices in EU countries which affect, or may affect in a significant way, the location of business activity in the EU and the group is regularly looking into further improving its functioning on the basis of its achievements.  A second example is the digitalised economy. The digitalised economy enables structures that shift profits to entities that are taxed at a very low rate or not at all. The Member States are working closely with the OECD to find a global solution that covers both the allocation of taxing rights and anti—profit shifting rules. We are doing everything we can to reach an agreement by mid-2021. Both the Council and the European Council will discuss these matters in March. To conclude, I believe that, not least in the context of the pandemic, we should continue to explore avenues for adjusting the EU policy framework for combating tax avoidance. I’m convinced that the Council and Member States will swiftly make further progress in the area of taxation, and the contribution of the European Parliament to this endeavour will be of the highest value for this discussion.