Final calendar for Commissioners-designate hearings in the European Parliament adopted
On Thursday 10 October, the European Parliament President and political group leaders adopted the detailed schedule of the hearings of the Commissioner-designate from 4 to 12 November. On the same day, the Legal Affairs Committee concluded the procedure of examining possible conflicts of interest and gave its green light for the confirmation hearings for all 26 Commissioners-designate to go ahead. European Parliament leaders also adopted the written questions prepared by the different committees that Commissioners-designate should reply to by 22 October. Each hearing will be followed by a meeting in which the Chairs of the Committees and group representatives concerned will evaluate the performance of the Commissioner-designate.After the completion of the evaluation process, the Conference of Committee Chairs will assess the outcome of all hearings and forward its recommendation to the Conference of Presidents. The latter will exchange views and decide whether to close the hearings in its meeting on 21 November. The full Commission needs to be elected by a simple majority of the votes cast in Plenary. The vote is currently scheduled to take place during the 25-28 November session in Strasbourg. All the declarations of interests and the written questions sent to the 26 Commissioners-designate can be found here.
Antigua and Barbuda removed from the EU list of non-cooperative jurisdictions for tax purposes
During their Ecofin meeting on Tuesday 8 October, EU Finance Ministers decided to remove Antigua and Barbuda from the EU blacklist of non-cooperative jurisdictions for tax purposes. With these updates, the list now consists of the following 11 jurisdictions: American Samoa, Anguilla, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, US Virgin Islands and Vanuatu. Antigua and Barbuda was included in the EU list of non-cooperative jurisdictions for tax purposes in October 2023, after a negative assessment from the OECD Global Forum with regard to exchange of information on request. Following changes to the applicable rules in Antigua and Barbuda, the Global Forum has granted it a supplementary review, which will be undertaken in the near future. Pending the outcome of this review, Antigua and Barbuda has been included in the EU “grey” list of jurisdictions with tax risks but which have committed themselves to take corrective measures. As Armenia and Malaysia fulfilled their commitments by amending a harmful tax regime, they were consequently removed from the grey list. Reacting to these updates, the chair of the FISC subcommittee of the European Parliament, MEP Pasquale Tridico (The Left, Italy) said in a statement that the European Parliament should have a stronger role in this process to ensure greater transparency in the listing procedure. The next revision of the lists is scheduled for February 2025.
EU adopts its position on the future of the UN tax negotiations
During the Ecofin meeting on 8 October, EU Finance Ministers also adopted, without discussion, the EU’s position on the future negotiations of the UN Framework Convention on international tax cooperation. The statement says that the terms of reference, approved in August by 110 countries (all non-EU), don’t reflect the EU’s key points of concern, namely as regards the need for: - consensus-based decision-making in order to ensure the inclusivity and effectiveness of a Framework Convention and its protocols, - commitments in the Convention to remain of a high level nature, - further analysis and consideration about the possible substantive areas for early and future protocols, - inclusion of taxpayers' rights and safeguards. For the EU and its Member States, it is important that, in its upcoming Resolution, the UN General Assembly requires the Ad Hoc Committee tasked with drafting the Convention to apply decision-making rules based on consensus. The Committee should, in any case, consider, adopting consensus-based decision-making rules as well as provisions on the modalities of work, conduct of business, and the election of officers, if not included in the upcoming Resolution, the EU says.
European Parliament debates EU support to the G20 Brazilian Presidency’s proposal of a global billionaire’s tax
On Wednesday 9 October, the European Parliament debated with the European Commission the EU's support for the Brazilian G20 Presidency’s proposal to tax billionaires to combat poverty and reduce inequality. Many MEPs from various groups backed the idea, which would impose a minimum annual tax of 2% on individuals with wealth exceeding 1 billion $. Left-leaning MEPs and Renew Europe viewed this as a step toward more social justice, while some on the right warned of risks such as capital flight and called for maintaining national sovereignty in taxation. During the debate, the European Commission, represented by Vice-President for Promoting our European Way of Life Margaritis Schinas, said the institution is very committed to improving tax justice in the EU and quoted as an example, the UNSHELL directive which remains on the Council table after three years. The Commission supports the G20 initiatives and has taken concrete steps to address these issues in the internal market, he said. A European Citizens' Initiative (ECI), launched one year ago and called “Tax The Rich”, didn’t gather the 1 million signatures required to force the European Commission to look into it.
FISC subcommittee to host a public hearing on simplification and transparency on 17 October
The FISC subcommittee of the European Parliament will host on Thursday 17 October, from 9:00 to 10:30, a public hearing on “Simplification and transparency: Role of simplified tax policy to encourage growth, job creation, competitiveness and cross-border business within the EU”. The public hearing will gather information and discuss in which ways reducing both taxpayers' tax compliance and governmental administrative costs could foster cross-border business, increase competitiveness, and eventually lead to more job creation and economic growth. Speakers include: - Prof. Dr. Eva Eberhartinger, full professor and Chair in Business Taxation (Betriebswirtschaftliche Steuerlehre) at the Department of Finance, Accounting, and Statistics at WU, Vienna University of Economics and Business; - Prof. Dr. Christiana HJI Panayi, Professor in Tax Law at Queen Mary University of London and - Dr Panayiotis Nicolaides, Director of research at EU Tax Observatory Paris School of Economics. On the same day from 10:30 to 11:30, FISC MEPs will also hold an exchange of views with Margrethe Vestager, Executive Vice President of the European Commission in charge of Europe Fit for the Digital Age, and Commissioner for Competition, on the fight against tax avoidance.
OECD working paper on tax arbitrage through closely held businesses
The OECD published on Monday 7 October a working paper exploring tax arbitrage incentives and behaviours in OECD countries, and their implications for tax systems more broadly. The paper focuses on how OECD tax systems might encourage business owners, in particular owners of unincorporated businesses and owner-managers of closely held incorporated businesses, to minimise their tax burdens through tax arbitrage. The paper finds that tax incentives to incorporate and earn capital income through corporations have increased in the last two decades. It shows that there has been an increase in incorporated businesses in many OECD countries, which has been partly driven by tax factors. The paper also finds that, in many countries, a combination of tax system features – related to corporate, dividend, capital gains, gift and inheritance taxation – provide particularly strong incentives to retain earnings inside corporations. The paper focuses on some key tax arbitrage channels, but more complex ones (involving for instance multiple business structures, including foreign ones), could be examined, according to the authors. Further work could more completely document, quantify, and compare arbitrage channels and risks across countries.
Algeria joins the OECD multilateral convention to tackle tax evasion and avoidance
On Thursday 10 October, Algeria signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, bringing the total number of jurisdictions that participate in the Convention to 148. The signing will pave the way for Algeria to engage in the exchange of information with 147 other jurisdictions, including all major financial centres. The Convention enables jurisdictions to engage in a wide range of mutual assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. The Convention is notably the primary instrument for swift implementation of the Standard for Automatic Exchange of Financial Account Information in Tax Matters (CRS), which enables more than 110 jurisdictions to automatically exchange offshore financial account information. Beyond the exchange of information on request and the automatic exchange pursuant to the Standard, the Convention is also a tool in the fight against illicit financial flows and is a key instrument for the implementation of the transparency standards of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project.
