Weekly Tax News – 23 April 2019

European Commission and Parliament blame unanimity rule for the failure on digital taxation

On Monday 15 April, MEPs in Strasbourg have discussed the failed adoption of a European digital services tax. Despite the ambitious plan proposed by the Commission and approved by the Parliament, the Council blocked the file in March. According to the MEPs, the proposal was rejected because of the unanimous vote rule for tax matters in the Council. The rapporteur Paul Tang (S&D, the Netherlands) and the Austrian MEP Othmar Karas (EPP) called for a gradual shift towards qualified majority voting, backing the recent plan proposed by the European Commission. Valdis Dombrovskis (European Commissioner for Financial Services) also expressed his disappointment and blamed the unanimity rule for the outcome on the proposal. However, he highlighted that the intense discussion on the topic provided a common framework to Member States that are introducing the tax at national level and set a base for the EU to speak with one voice at international (OECD/G20) level. 

Fiscalis programme 2021-2027 adopted in Strasbourg

On Wednesday 17 April, MEPs adopted the Fiscalis programme for 2021-2027 supporting cooperation between national tax administrations to fight tax evasion and avoidance. The priorities set for the tax authorities include: fighting cross-border VAT fraud; exchanging of best practices on recovering of taxes; closing loopholes in the implementation of EU laws on administrative cooperation in the field of taxation; promoting an effective exchange of information. The budgetary aspects still need to be defined in the framework of the negotiations on the Multiannual Financial Framework 2021-2027, but the Parliament has already required a 10% increase over the € 270 million proposed by the Commission.

New Greens/EFA report tax competition

On Wednesday 3 April, the Greens/EFA group in the European Parliament has published a report that analyses how governments in the European Union compete with each other to attract wealthy people by granting tax breaks and other preferential treatments. According to the study, the United Kingdom and the Netherlands are at the forefront of these practices. Greens/EFA MEPs call for the Commission to present an action plan against double non-taxation and tax evasion in order to put an end to harmful tax competition between EU Member States.