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The previous European Parliament successfully mobilised public opinion, generated political momentum and put pressure on national governments. At the same time, it also provided the EC with a strong case for action. A number of tax-related proposals from past years can be traced back to repeated calls and campaigns from the Parliament. To name just a few, public country by country reporting (CBCR), the tax intermediaries Directive (‘DAC 6’) and the whistleblower protection Directive.
The departing EC, for its part, reacted to scandals such as Luxleaks and Panama Papers, and heeded the European Parliament’s calls for action. The EC’s motivation was also bolstered by Europe-wide opinion polls that have repeatedly shown that one of areas where citizens want more EU action is on tax. The EC would have been foolish not to act.
And the EC has been relatively successful in its efforts, with 14 tax Directives adopted! For example, it managed to get EU Member States to agree on more extended exchange of tax information between tax administrations. It pushed through the anti-tax avoidance Directive (ATAD) that implements OECD BEPS into EU law. It established a list of non-cooperative tax jurisdictions. And it has taken forward a number of key VAT files, including on e-commerce. The list goes on.
The EC further demonstrated its ability to expand its tax reach into conventionally non-tax areas. Famously, the EC’s competition department (DG COMP) under the firm leadership of the Danish Commissioner Margarethe Vestager initiated several state aid investigations into EU Member States offering beneficial tax treatment to large multinationals.