EU finance ministers will discuss how to combat harmful tax practices within the EU during their informal meeting in Berlin this weekend, according to the German presidency’s preparatory documents seen by EURACTIV.
Taxation is on top of the agenda of the German presidency of the
Council for this semester. The efforts for setting up a digital tax and a
minimum corporate tax at the global level will be part of the tax
discussions on Saturday.
But Germany also wants to address the fiscal dumping inside the EU,
facilitated by “sweetheart deals” that some governments offer to
multinationals to bring their tax bill close to zero.
In order to combat these practices, the EU finance ministers (Ecofin
Council) will discuss a reform of the Code of Conduct Group, which was
set up to fight against unfair tax competition inside Europe and
elsewhere.
Ministers will explore which elements of the Group’s mandate, unchanged since 1997, should be amended.
“The group’s mandate should, in particular, reflect the developments
in international tax law that have happened in the meantime, as well as
further developments in international tax law,” said the German
presidency preparatory document for the discussion sent to the finance
ministries.
“These changes to the mandate are necessary to ensure that the group
can continue to make a constructive contribution to fair and effective
taxation,” the document said.
According to an Oxfam report, Cyprus, Ireland, Luxembourg, Malta and
the Netherlands would be listed as tax havens if the EU criteria for
foreign jurisdictions were applied to member states.
In 2015 alone, corporate tax dodging costs France, Spain, Italy and Germany an estimated €35 billion.
Own resources
Another tax-related matter to be discussed by the Ecofin will be the
design of new duties and levies to finance the €750 billion EU recovery
fund to overcome the crisis caused by the COVID-19.
The German presidency wants to exchange views on Friday on the member
states’ priorities and concerns ahead of the Commission’s proposal for a
carbon border adjustment mechanism, a digital levy, or a revised
Emissions Trading System.
Ministers will be also asked whether other new taxes that support
certain EU priorities (like the green agenda) should be created to
finance the unprecedented borrowing from the markets to finance the
recovery.
“Linking EU policies with revenue for the EU could be a new route in
the enforcement of common policies while creating revenue which can be
described as a true ‘own resource’ for the EU, which in turn can
contribute to overcoming the ‘juste retour’ dilemma,” the German document reads.
Recovery Facility
The ministers will not only debate how to finance the recovery fund
but also how to spend the big stimulus, in particular the €672.5 billion
of the ‘Recovery and Resilience Facility’.
The ministers will discuss on Friday the economic situation, what
policies should be prioritised in the recovery, and how to use the
recovery facility to overcome the most severe recession in the EU’s
history.
The preparatory document says that member states’ plans to unlock the
EU funds should include “ambitious” reforms and investment projects to
make their economies and the EU more resilient. They should address
country-specific challenges, especially those identified by the
Commission in the context of the country recommendations.
The Ecofin foresees deciding by next spring on the national plans submitted to access the recovery funds.
EURACTIV
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