Moscovici Talks EU Tax Reform
The European Union (EU) needs an “ambitious blueprint for taxation,” Tax Commissioner Pierre Moscovici has said.
Speaking at a recent conference, Moscovici said: “The European Union needs an ambitious roadmap to put an end to the distortionary nature of its tax policy and regulatory framework. In my view, the way forward is clear: the EU must enhance transparency in tax matters; and member states must coordinate their tax systems to counter tax base erosion.”
Discussing the proposal made by the Commission last month for the automatic exchange of information on tax rulings, Moscovici said that the rulings are not in themselves a problem. However, he pointed out that, “without visibility on these rulings, governments are not even aware that they need to take action to protect their tax base.”
Under the plans, EU member states will be required to share details of all their cross-border tax rulings every three months. Member states will be able to request further information if necessary. The information shared “will be comprehensive enough to allow member states to assess whether a tax ruling is relevant to them. But it will also be simple enough to avoid unnecessary administrative burdens,” Moscovici said.
Moscovici added that the Commission will bring forward a new Action Plan to combat profit shifting. It will seek to build on the work of the Organisation for Economic Cooperation and Development (OECD) on base erosion and profit shifting. The Commission will relaunch its plans for a Common Consolidated Corporate Tax Base (CCCTB), with the aim of harmonizing the tax base for many companies operating across borders in the EU. He argued that the CCCTB would make the internal market more competitive and help to tackle tax evasion.
Moscovici acknowledged that the Commission has “a fine line to tread.” He explained: “On the one hand we want to put an end to tax avoidance, evasion, and aggressive tax planning strategies and ensure that profits are taxed where the value is generated. On the other hand we must be watchful not to penalize legitimate business, either by imposing disproportionate administrative burdens, by creating legal uncertainty, or by generating situations which lead to double taxation.”
