Main highlights from written answers of Commissioners-designate
The written answers from European Commissioners-designate to questions from the European Parliament were published on Wednesday 23 October. These responses outline the commitments of each Commissioner-designate, contingent on their confirmation by the European Parliament. In his written answers, Stéphane Séjourné (France), Executive Vice-President-designate for Prosperity and Industrial Strategy, commits to developing a Single Market Strategy focused on removing regulatory and administrative barriers and simplifying the legislative framework. He also plans to introduce a dedicated SME passport to reduce administrative burdens and create a harmonized, simplified set of rules across the EU (the so-called "28th regime") to foster growth among innovative SMEs. In his answers, Valdis Dombrovskis (Latvia), Commissioner-designate for Economy and Productivity; Implementation and Simplification, pledges to coordinate the efforts of all commissioners on burden reduction, implementation, and simplification. His initial focus will be on following up on the main priorities identified by recent Draghi and Letta reports, as well as the European Commission's public consultation on bureaucracy reduction. To this end, the Commission will introduce two new tools: “implementation dialogues” with stakeholders, which each Commissioner will hold at least twice per year, and “reality checks” to assess how rules are applied on the ground by companies and administrations. Wopke Hoekstra (The Netherlands), Commissioner-designate for Climate and Taxation, states in his written answers that he will begin his mandate by stress-testing the current EU tax acquis to identify and address inconsistencies, such as overlaps, contradictions or outdated regulations. He supports current proposals and will specifically work to relaunch discussions in the Council on the Debt Equity Bias Reduction Allowance (DEBRA). Mr Hoekstra also expressed readiness to examine further tax issues related to crypto assets and the taxation of the financial sector if needed. He commits to engaging with Member States to foster a more balanced and coherent approach to environmental taxation. The next stage in the confirmation process will be the parliamentary hearings, scheduled to take place from 4 November to 12 November, before a final vote on the whole college of Commissioners in Plenary on 27 November.
ViDA likely to go on the table of EU Finance Ministers on 5 November for decision
The Hungarian Presidency of the Council of the EU has reportedly secured Estonia’s agreement on a draft compromise for the final part of the VAT in the Digital Age (ViDA) package, which has been stalled over the deemed supplier rule for months, during the meeting of the high-level working party on tax questions on Thursday 24 October. The deemed supplier rule, which would make online platforms responsible for collecting VAT on behalf of their users, has faced resistance from Estonia, particularly over concerns that it could negatively affect small traders who fall below the VAT registration threshold. In an effort to break the deadlock, Hungary reportedly presented a new compromise proposal that further refines the SME opt-out by allowing Member States to exclude SMEs from the deemed-supplier regime without needing to justify the decision to the VAT committee. The compromise also reportedly introduces a transitional period during which the rule would be voluntary from 1 July 2028 and mandatory from 1 January 2030. The Hungarian Presidency will now ask EU ambassadors for their political support on 30 October and, as a follow-up, submit the draft compromise to EU Finance Ministers at their meeting on 5 November. This opens the door to the long-awaited adoption of the full package, which also includes provisions on e-invoicing and single VAT registration, already provisionally agreed upon in May. The European Parliament, which delivered an opinion on ViDA in November 2023, will be asked to deliver a new opinion due to the substantial differences between the Commission's initial proposal and the text agreed upon by the Member States.
OECD Secretary-General delivers his tax report to G20 Finance Ministers
OECD Secretary-General Mathias Cormann released his traditional tax report to G20 Finance Ministers on Thursday 24 October during their meeting in Washington. The report outlines recent developments in international tax reform since July 2024, including updates on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. It also covers progress on the implementation of the BEPS minimum standards and tax transparency, as well as updates on tax policy, tax and inequality, and tax administration. The text of the Multilateral Convention on Amount A of Pillar One is stable and has nearly achieved full consensus among members of the Inclusive Framework. The focus of the remaining work is on refining the consensus regarding Amount B, according to the report. At this stage, the issues are primarily political rather than technical, and negotiations are ongoing. In their communiqué, the G20 Ministers encouraged members of the OECD Inclusive Framework to complete the negotiations on a final package for Pillar One by resolving the remaining issues concerning a framework for Amount B, enabling the Multilateral Convention to be finalized and opened for signing as soon as possible. The G20 Ministers also expressed interest in discussing potential areas of cooperation to ensure that ultra-high-net-worth individuals are effectively taxed, though without committing to any specific actions. Finally, they encouraged “constructive discussions” at the United Nations to develop a framework convention but warned that it should aim for broad consensus, coordinate with existing international bodies working on tax and seek to avoid unnecessary duplication of efforts.
MEPs debate the Letta report on the future of the Single Market
On Monday 21 October, the European Parliament Plenary session convened to hear a presentation by Enrico Letta on his report entitled "Much More Than a Market." Mr Letta emphasised the urgent need to deepen financial market integration to create a new paradigm for economic development and innovation. Central to Mr Letta’s vision for strengthening the Single Market was the need for better integration of the telecommunications and energy sectors, as well as the establishment of a real Capital Markets Union. Mr Letta also highlighted the issue of the investment gap in Europe, noting that 300 billion € of European savers’ money is invested in the US each year — funds which could instead stimulate innovation to achieve goals under the Green Deal. Notably, the report’s novel proposals included the creation of a so-called 28th regime and the establishment of a fifth freedom based on the free movement of research, innovation, and education across the Single Market. Following his presentation, MEPs engaged in a debate, where many members praised Mr Letta’s diagnosis of the Single Market's issues. A common view among MEPs was the importance of reducing bureaucracy, preventing capital outflows, placing the daily lives of EU citizens at the heart of all transformations, properly implementing existing measures and advancing the movement of ideas and knowledge in Europe. MEPs also stressed the need to act quickly on Mr Letta’s recommendations while acknowledging that it may be challenging without a single Commissioner responsible for the internal market in the new European Commission. Additionally, it was repeatedly pointed out that, while Mr Letta suggests introducing a fifth freedom of movement in Europe, some countries are closing their borders once again.
