On Wednesday 17 April 2024, EU officials, experts and tax advisers discussed how to make the EU tax system simpler, rationalised and future-proof at a conference organised by the European Tax Adviser Federation (ETAF) in Brussels. The full-room event also gathered 1 800 people online.
In his introductory speech, ETAF President, Philippe Arraou gave some preliminary food for thought to panellists by presenting the ETAF manifesto, which sets out 25 recommendations to the European Commission and the European Parliament for the next five years.
During the first panel, moderated by Elodie Lamer, journalist for Tax Notes, speakers had a forward-looking discussion about what the future tax policies under the next European Commission should look like.
Benjamin Angel, Director of Direct Taxation, Tax Coordination, Economic Analysis and Evaluation at the DG TAXUD of the European Commission reminded the audience that the main priority is to adopt the eight texts currently on the table. He asserted that the discussion will restart still under the Belgian Presidency of the Council of the EU on the proposal for a Directive to fight the misuse of shell entities (UNSHELL). While not expected before the end of the current mandate, the Securing the Activity Framework for Enablers (SAFE) is unlikely to completely disappear from the agenda of the next European Commission, he said. In his view, possible other “trendy” topics could also grow in importance, such as the taxation of cross-border teleworkers.
No new tax proposal is expected under the remaining mandate, as the proposal for a ninth amendment to the Directive on administrative cooperation (DAC) in tax matters, to accompany the implementation of Pillar Two and avoid multiple reporting for companies in scope, has been paused since the work on administrative guidance is still ongoing at the OECD, Mr Angel said. He, however, announced that an honest evaluation of the efficiency of the successive amendments to the DAC (from DAC1 to DAC6) will be launched in May.
For MEP Isabel Benjumea Benjumea (EPP, Spain), the shift to the right of the European Parliament predicted in the polls after the 2024 European elections will result to a lesser push towards greater harmonisation of taxation. “I believe that the language of coordination, exchange of information, simplification and competitiveness will be the keywords in any tax negotiation in the next mandate”, she said.
Panayiotis Nicolaides, Director of Research at the EU Tax Observatory, pointed out that taxation is dictated by economic conditions. The various crises may force Member States to increase their tax revenues and this is what will certainly be the driver for the future tax policies, in his view. In this regard, he advocated for a global minimum tax on billionaires’ net wealth.
Representing the tax profession in the debate, Bart Van Coile, President of the Belgian Institute for Tax Advisors and Accountants (ITAA), wished for a “new European Commission that builds on trust with taxpayers and intermediaries, especially regulated tax advisers and accountants that follow strong ethical codes of conduct”. EU legislators should prioritise preventing misconduct by unregulated intermediaries, simplifying tax laws and compliance for businesses and tax advisers and alleviating the burden on taxpayers struggling with evolving regulations, especially SMEs, he outlined.
The second panel, moderated by Jacomien van den Hurk, Director EU Public and Regulatory Affairs at PwC, touched upon the future perspectives for tax advisers in the EU. Panellists discussed in-depth the complexity of EU tax laws and the recent announcement of the European Commission to reduce reporting requirements for companies by 25%.
Ana Xavier, Head of Unit Economic Analysis of Taxation, Impact Assessment and Evaluation support at the DG TAXUD of the European Commission, invited the audience to reflect on the source of the high administrative burden when it comes to taxation, i.e. the fragmentation of tax systems in Europe.
This fragmentation generates complexity and costs implications, which can reach in some cases up to 54 billion € for corporate income tax compliance, she said.
For Sean Bray,Director of European Policy of Tax Foundation Europe, tax design and its purpose are of utmost importance. He regretted the often-overlooked fairness aspect and the potential scalability impact of complex tax legislation on companies, urging for a broader discussion on these issues within the European context.
Transparency and the increasing call for information on the companies’ tax strategy have also been addressed during the panel. Pascal Saint-Amans, Former Director of the OECD Centre for Tax Policy and Administration, Non-resident fellow at Bruegel, Partner at Brunswick,reflected on the evolution of tax perception over the past 15 years, from an “obscure technical topic left to specialists” to a highly scrutinized issue by society and governments. This shift has led to increased political interest and demands for transparency, prompting businesses to reconsider their approach to tax policy and risk management. He also emphasised the importance of reputation and societal duty alongside compliance, urging companies to prepare for forthcoming transparency requirements and consider their narrative and position on tax matters at the board level.
Finally, panellists discussed the impact of digitalisation and Artificial Intelligence (AI) on the work of tax advisers. In this regard, Florin Toma, Expert accountant and Member of the Body of Expert and Licensed Accountants of Romania (CECCAR), said we need to distinguish between the direct impact on tax advisers’ work and on their interactions with tax authorities in a digital environment. He acknowledged the potential of AI for certain repetitive tasks to enhance efficiency, accuracy, and predictive analysis in tax advisory work, potentially leading to cost reduction and freeing up time for strategic advice. However, he raised concerns about the future role of tax advisers in an environment increasingly driven by generative AI, emphasising the importance of continuous training and of the professional organisations to adapt to these technological trends and ensure the continued relevance of tax professionals. This is all the more important because tax advisers will be the ones helping SMEs going digital, he concluded.
Notes to editors:
Our event can be watched again online here: https://www.youtube.com/@etaf-europeantaxadviserfed6173
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64
