Richard Cornelisse

Posts Tagged ‘Commission’

VAT eLearning course – European Commission

In EU development on 12/04/2014 at 10:12 am

An eLearning course has been developed by the European Commission under the Fiscalis 2013 Programme to help tax officials in EU countries and others with a particular interest in value added tax (VAT) get a good basic knowledge of EU Directive 2006/112/EC, known as ‘the VAT Directive’.

The training has been prepared by the Commission’s Taxation and Customs Union Directorate General in close collaboration with expert taxation officials and is freely available for download.

The course is available in the following languages: EN, BG, NL, EL, HU, LV, PL, SL, ES, SV, MK, IT.

About the electronic training course

This course aims at presenting the fundamental elements of the VAT Directive. It has an EU-wide perspective and does not explain national variations or derogations. By the end of the course the learner should have a good understanding of the basic principles of the EC VAT directive.

The course contains six hours of training and consists of fourteen units as follows:

  • Introduction
  • Context
  • Legal framework
  • Scope
  • Territory
  • Taxable persons
  • Transactions
  • Place of taxable transactions
  • Chargeable event and taxable amount
  • Rates
  • Exemptions
  • Right to deduct
  • Obligations
  • Final assessment

How to Start and Use the Course?

  1. First, extract the zip-file to a folder of your choice on your computer
  2. Read the ‘Quick Start Guide’ document
  3. This document will provide you with all the necessary information
  4. Install the course to your system as specified in the Quick Start Guide document or ask your system administrator to do so
  5. Open the course and follow the instructions within the course

via VAT eLearning course – European commission.

Press release – Commission takes Luxembourg to Court of Justice over VAT in the case of independent groups of persons

In EU development on 21/02/2014 at 10:45 pm

The European Commission has decided to take Luxembourg to the Court of Justice of the European Union over the VAT system applied by Luxembourg to independent groups of persons.

Under the VAT Directive, certain services supplied by a group to its members are exempt from VAT to avoid making operations downstream more expensive for these members, given that the VAT cannot be deducted. Strict conditions must be complied with to benefit from the exemption.

Under Luxembourg law, the services provided by an independent group to its members are free of VAT provided that the members’ taxed activities do not exceed 30% (or 45% under certain conditions) of their annual turnover. Group members are also allowed to deduct the VAT charged to the group on its purchases of goods and services from third parties. Lastly, operations by a member in his or her own name but on behalf of the group are regarded as outside the scope of VAT.

Under European law, in order to be exempt from VAT the services provided by an independent group to its members must be directly required for their non-taxable or exempt activities. The Luxembourg rule providing for a ceiling for taxed operations does not fulfil this condition. Moreover, group members should not be allowed to deduct VAT charged to the group.

The European Commission consequently takes the view that these arrangements are not compatible with the EU’s VAT rules. In addition, they would be likely to produce distortions of competition.

Background

The Commission sent a reasoned opinion to the Luxembourg authorities formally requesting them to bring their legislation into line with Directive 2006/112/EC on the common system of VAT (IP/12/63).

On 7 August 2012 Luxembourg excluded from the system groups whose services were mainly used for taxed operations. However, this amendment is not sufficient to bring Luxembourg law into line with the Directive.

Useful links

For press releases on infringement cases in the taxation or customs field see:
http://ec.europa.eu/taxation_customs/common/infringements/infringement_cases/index_en.htm

For the latest general information on infringement measures against Member States see:
http://ec.europa.eu/community_law/index_en.htm

On the February infringement package decisions: MEMO/14/116

On the general infringement procedure: see MEMO/12/12

via EUROPA – PRESS RELEASES – Press release – Commission takes Luxembourg to Court of Justice over VAT in the case of independent groups of persons.

Tax Fraud: Commission looks at how VAT collection and administrative cooperation can be improved

In Audit Defense, EU development, Processes and Controls on 13/02/2014 at 6:05 pm

Tax Fraud: Commission looks at how VAT collection and administrative cooperation can be improved

Today the Commission adopted two reports which shed more light on problems linked to fighting Value Added Tax (VAT) fraud within the EU, and which identify possible remedies.

The first report looks at VAT collection and control procedures across the Member States, within the context of EU own resources. It concludes that Member States need to modernise their VAT administrations in order to reduce the VAT Gap, which was around €193 billion in 2011. (see IP/13/844) Recommendations are addressed to individual Member States on where they could make improvements in their procedures.

The second report looks at how effectively administrative cooperation and other available tools are being used in order to combat VAT Fraud in the EU. It finds that more effort is needed to enhance cross border cooperation, and recommends solutions such as joint audits, administrative cooperation with third countries, more resources for enquiries and controls and automatic exchange of information amongst all Member States on VAT. Both reports are part of the broad Commission Action Plan to fight against tax fraud and evasion (see IP/12/1325), and can be found online on the European Commission’s Taxation and Customs Union website .

  1. Report I from the Commission to the Council and the European Parliament on the application of Council Regulation (EU) no 904/2010 concerning administrative cooperation and combating fraud in the field of value added tax
  2. Report II from the Commission to the Council and the European Parliament. Seventh report under Article 12 of Regulation (EEC, Euratom) n° 1553/89 on VAT collection and control procedures.

via EUROPA – PRESS RELEASES Daily News.

EU to establish a cooperation framework with non EU countries to fight VAT fraud

In EU development on 08/02/2014 at 9:09 am

Tackling tax fraud: Commission proposes stronger cooperation with non-EU countries on VAT
As part of the fight against tax fraud, the Commission has today asked for a mandate to negotiate VAT administrative cooperation agreements in with Russia and Norway.

An estimated €193 billion in VAT revenues (1.5% of GDP) was lost due to non-compliance or non-collection in 2011. While this loss is attributed to a mix of different factors, VAT fraud is certainly an important contributor.

Cooperation agreements with the EU’s neighbours and trading partners would improve Member States’ chances of identifying and clamping down on VAT fraud, and would stem the financial losses this causes. (See EC Press 6/2/2014).

Balkans.com Business News Correspondent – 07.02.2014

As part of the intensified battle against tax fraud, the Commission today launched the process to start negotiations with Russia and Norway on administrative cooperation agreements in the area of Value Added Tax (VAT). The broad goal of these agreements would be to establish a framework of mutual assistance in combatting cross-border VAT fraud and in helping each country recover the VAT it is due. VAT fraud involving third-country operators is particularly a risk in the telecoms and e-services sectors. Given the growth of these sectors, more effective tools to fight such fraud are essential to protect public budgets. Cooperation agreements with the EU’s neighbours and trading partners would improve Member States’ chances of identifying and clamping down on VAT fraud, and would stem the financial losses this causes. The Commission is therefore asking Member States for a mandate to start such negotiations with Russia and Norway, while continuing exploratory talks with a number of other important international partners.

Algirdas Šemeta, Commissioner for Taxation, said: “The supply chain has evolved dramatically since VAT was first implemented in the EU. Globalisation and e-commerce open up new windows of opportunity, but also create new risks. Fraudsters play on cross-border differences and information gaps between countries. The EU needs to work hand-in-hand with its international partners if it is to successfully combat VAT fraud. That is what the Commission is proposing today, with a request for negotiating mandates to formalise this cooperation.”

The cooperation agreement would be based on the Regulation on administrative cooperation in the field of VAT, which currently sets the framework for intra-EU collaboration in this area. Among the ways in which Member States cooperate against VAT fraud are by allowing each other access to their data bases, and exchanging information (either automatically or on request) on taxpayers’ activities. Eurofisc is also a very effective network for Member States to exchange information and intelligence on VAT fraud.

The use of such instruments could be extended to third countries through cooperation agreements against VAT fraud. The EU intends to negotiate such agreements with neighbouring countries, its main commercial partners and countries to be considered leaders in the field of electronically supplied services. For now, exploratory talks have been initiated with Norway, Russia, Canada, Turkey and China. Both Norway and Russia have already indicated that they are now ready to start official negotiations.

via EU to establish a cooperation framework with non EU countries to fight VAT fraud.

Fighting Tax Evasion and Avoidance: A year of progress

In EU development on 17/12/2013 at 9:47 am

Why has the Commission made fighting tax fraud and evasion a priority?

Every year, billions of euros of public money are lost in the EU due to tax evasion and tax avoidance. As a result, Member States suffer a serious loss of revenue, as well as a dent to the efficiency their tax systems. Businesses find themselves at a competitive disadvantage compared to their counterparts that engage in aggressive tax planning and tax avoidance schemes. And honest citizens carry a heavier burden, in terms of tax hikes and spending cuts, to compensate for the unpaid taxes of evaders. Fighting tax evasion is therefore essential for fairer and more efficient taxation.

The cross-border nature of tax evasion and avoidance, along with Member States’ concerns to maintain competitiveness, make it very difficult for purely national measures to have the full desired effect. Tax evasion is a multi-facetted problem requiring a multi-pronged approach, at national, EU and international level.

EU Member States need to cooperate closely if they are to increase the fairness of their tax systems, secure much needed tax revenues and help to improve the proper functioning of the Single Market. In addition, the “strength in numbers” of the EU acting as a united block helps give more weight in achieving faster and more ambitious progress at international level in the area of tax good governance.

What progress has been made in fighting tax evasion and avoidance at EU level over the past year?

In December 2012, the Commission presented an Action Plan to better tackle tax evasion and corporate tax avoidance (IP/12/1325). This Action Plan kick-started what has become a highly intensive EU campaign to better fight these problems. It was endorsed at the European Council in May, where EU leaders called for effective steps to be taken to combat tax evasion and avoidance.

In the 12 months since the Action Plan was presented, there has been remarkable progress in this area at EU level, and a number of important new initiatives have been put forward by the Commission. Among the actions taken in 2013 were:

  1. Expanding the automatic exchange of information widely within the EU

In June, the Commission proposed extending the automatic exchange of information between EU tax administrations, to cover all forms of financial income and account balances (IP/13/530). This paves the way for the EU to have the most comprehensive system of automatic information exchange in the world. It will also ensure that the EU will well-placed to implement the new global standard (see below) quickly and with minimum disruption to businesses. The proposal could be agreed by Member States in the first half of 2014.

  1. Tightening EU corporate tax rules against aggressive tax planning

In November, the Commission proposed measures to close loopholes in the Parent-Subsidiary Directive and address national mismatches. This will shut off opportunities for a particular type of corporate tax avoidance (IP/13/1149). The proposal should be discussed and possibly agreed by EU Finance Ministers under the Greek Presidency.

  1. Negotiating with neighbouring countries for greater transparency

The Commission was given a mandate to negotiate stronger tax agreements with Switzerland, Andorra, Monaco, San Marino and Liechtenstein (MEMO/12/353) in May. Commissioner Šemeta immediately visited all 5 countries, to give political drive to the talks and underline that the EU was looking for swift and ambitious negotiations. Formal negotiations have begun with the 4 smaller countries and will start with Switzerland as soon as it has its own negotiating mandate (expected before the end of the year).

  1. Establishing a Platform on Tax Good Governance

The Commission established a Platform on Tax Good Governance to discuss the best ways to fight tax evasion and avoidance and monitor progress in this area at both EU and national level (IP/13/351). The Platform has already started work on how best to implement the Commission’s Recommendations on Aggressive Tax Planning and on how to deal with tax havens. Its work programme also includes several other areas of focus, including an EU Taxpayer’s Code, ways to increase transparency of multinationals and looking at the effects of EU tax policy on developing countries.

  1. Launching the debate on Digital Taxation

The Commission established a High Level Expert Group on Taxation of the Digital Economy, chaired by former Portuguese Finance Minister Vitor Gaspar. It will meet for the first time on 12 December (IP/13/983). Corporate tax avoidance is an especially pressing problem in the digital sector. The group will look at the particular challenges in digital taxation and propose solutions in the first half of 2014 to ensure that the digital sector pays its fair share of taxes, while not creating tax obstacles to this pro-growth sector.

  1. Agreeing new instruments to better fight VAT fraud

In June, Member States unanimously agreed on a set of measures to better combat VAT fraud. The Quick Reaction Mechanism and reverse charge mechanism will allow Member States to react more quickly and efficiently to large-scale VAT fraud, thereby reducing substantial losses for public finances. These new instruments will be ready for use from 2014 (IP/12/868).

  1. Proposing new standard VAT form to improve tax compliance

In October, the Commission proposed a simplified, standard VAT form for use by businesses throughout Europe. In addition to easing life for businesses, this standard form will help to improve tax compliance by simplifying the procedure for businesses to declare the VAT they owe (IP/13/988). And greater compliance means greater revenues for national budgets.

  1. Publishing a new report on VAT Gap in EU

The Commission published a study on the VAT Gap in the EU, which amounted to €193 billion in 2011. Prior to this study, the most recent estimates for the VAT Gap dated back to 2006. The new figures help to better understand the recent trends in the EU, to better shape and target policy measures to improve VAT compliance (MEMO/13/800).

  1. Preventing harmful tax competition

The Commission has continued to scrutinise and control state aid granted through tax measures to companies. It has also supported the work of the Code of Conduct Group against harmful tax competition, contributing detailed analyses of many national tax regimes for consideration by the Code Group.

  1. Introducing more corporate transparency

The new Accounting Directive introduces an obligation for large extractive and logging companies to report country-by-country the payments they make to governments, and also on a project-basis. Taxes levied are among the payments to be reported. The revised Capital Requirements Directives (CRDIV) improves transparency in the activities of banks and investment funds in different countries, particularly regarding profits, taxes and subsidies in different jurisdictions (MEMO/13/690). It is hoped that the implementation of the May European Council Conclusions will ensure that all large companies and groups make public how much they pay in tax and in which country, as banks now need to do. Finally, the Commission’s proposal to revise the anti-money laundering legislation includes a specific reference to tax crimes (IP/13/87).

The active work at EU-level was also mirrored in the active role that the EU played in pushing forward international discussions to improve tax good governance worldwide (see below).

Where is there room for greater action at this stage in the fight against tax evasion and avoidance in the EU?

First and foremost, agreement is needed on the Savings Tax Directive (MEMO/12/353) before the end of 2013, as called for by the European Council in May. This is crucial to close loopholes in the Savings Directive, and ensure that it can continue to work well. An EU-wide framework for automatic information exchange will also give banks more legal certainty and clarity about reporting obligations.

Progress on the Common Consolidated Corporate Tax Base (CCCTB) is also very important to better tackle corporate tax avoidance (IP/11/319). In addition to substantially reducing administrative burdens for businesses, the CCCTB has the potential to eliminate many opportunities for profiting by multinational companies. This is recognised in the OECD’s action plan against Base Erosion and Profit Shifting (BEPS), and agreement on the CCCTB would ensure that the EU is the standard setter in this area.

As stated in last year’s Action Plan, the Commission would encourage Member States to make better use of the Code of Conduct on Business Taxation. This can be a highly effective tool for identifying and eliminating harmful tax regimes within the EU. The Commission is currently considering ways of strengthening the Code, for example by extending its scope or amending the Code criteria.

In addition, Member States have been called upon to intensify efforts at national level to tackle tax evasion and avoidance. Country specific recommendations were given to 13 Member States to improve tax compliance at national level. And the 2013 Annual Growth Survey again called on all governments to step up their national campaigns against tax evasion, and strengthen their coordinated action to tackle aggressive tax planning and tax havens.

Meanwhile, the Commission is continuing work on the medium and long-term actions set out in the Action Plan against tax evasion last year. These include a Taxpayers’ Code, an EU Tax Identification Number and possibly common sanctions across the EU for tax offences.

What has been achieved at international level to improve the fight against evasion and avoidance, and what has been the EU’s contribution to this?

In September 2013, G20 leaders agreed on concrete measures to better tackle tax evasion and corporate tax avoidance worldwide. First, they confirmed a move to greater international tax transparency, by agreeing that automatic exchange of information should be the new global standard of cooperation between tax administrations. Second, they endorsed the OECD’s BEPS action plan to curb corporate tax avoidance worldwide. These measures confirm a major improvement in international taxation – one that will make it fairer, more effective and better equipped for the 21st century economy. With the political commitment made, the focus is now on implementing these changes.

With regard to the automatic exchange of information, the EU has drawn on its own experience and expertise in this area to actively contribute to the development of the new global standard. In particular, the Commission has tried to ensure that the global standard takes into account the existing EU automatic information exchange arrangements and is compatible with EU law (e.g. data protection), so as to avoid any unnecessary difficulties for businesses. The latest draft of the global standard appears to meet at least most EU needs, and the OECD intends to present the final version to the G20 Finance Ministers in February for agreement.

Meanwhile, the BEPS Action Plan complements the EU measures to tackle aggressive tax planning, while also addressing issues that can only be effectively dealt with at international level. The BEPS action plan sets out 15 specific actions to re-adjust international standards in taxation so that they are better shaped for the changing global economy. Over the next year, new rules and standards will be developed in areas such as permanent establishment, transfer pricing and digital taxation. The aim is to protect the fairness and integrity of tax systems, and better equip governments in their clamp down on corporate tax avoidance. The EU has already valuable experience in various areas covered by BEPS such as transfer pricing and tackling hybrid mismatches. And the work of the Commission’s expert group on digital taxation will provide input for the OECD digital taskforce. With this input and experience to offer, the EU can continue to play a central role in the work to implement BEPS, particularly if a strong, coordinated position is maintained amongst all Member States.

Annex

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A ‘European Taxpayer’s Code’ – European commission

In Uncategorized on 17/05/2013 at 5:56 pm

A ‘European Taxpayer’s Code’

Title

Consultation on a ‘European Taxpayer’s Code’ [short-name: TPCODE]

Policy fields

Taxation

Target groups

All citizens and organisations are welcome to contribute to this consultation. Contributions are particularly sought from individual citizens, businesses, tax practitioners, academics, intergovernmental, non-governmental and business organisations, tax administrations.

Period of consultation

From 25.02.2013 to 17.05.2013

Objective of the consultation

The Commission adopted on 27th June 2012 a Communication on the fight against tax fraud and tax evasion. An Action Plan which details concrete proposals to strengthen the fight against tax fraud and tax evasion was adopted on 6th December 2012.

One of the 34 measures contained in the Action Plan is the development of a European Taxpayer’s Code which is described as follows (action 17):

“In order to improve tax compliance, the Commission will compile good administrative practices in Member States to develop a taxpayer’s code setting out best practices for enhancing cooperation, trust and confidence between tax administrations and taxpayers, for ensuring greater transparency on the rights and obligations of taxpayers and encouraging a service-oriented approach.

The Commission will launch a public consultation on this at the beginning of 2013. By improving relations between taxpayers and tax administrations, enhancing transparency of tax rules, reducing the risk of mistakes with potentially severe consequences for taxpayers and encouraging tax compliance, encouraging Member States’ administrations to apply a taxpayer’s code will help to contribute to more effective tax collection.”

The Commission services are launching this public consultation in order to collect the opinions of all interested stakeholders on the development of a European Taxpayer’s Code. The questions first aim at assessing the knowledge about and the concrete experience with national taxpayer’s codes (when they exist). Stakeholders are then invited to give their views on the general and procedural principles to be considered in the context of the development of a European Taxpayer’s Code. Finally, contributions are asked on additional topics which could be seen as a natural extension of the fundamental principles, rights and obligations of a Taxpayer’s Code.

The views expressed by the contributors will be used by Commission services to identify the appropriate content of a European Taxpayer’s Code and develop the appropriate policy response. The contributions may also be used in the preparation of possible impact assessments in relation to the Action Plan and more generally the policy area concerned.

How to submit your contribution

We welcome contributions from citizens, organisations and public authorities. Please click here  to submit your contribution.

Received contributions will be published on the Internet. It is important to read the specific privacy statement attached to this consultation for information on how your personal data and contribution will be dealt with.

Please ensure that with the exception of Part III of the questionnaire where your contact details are included your contribution includes no name or personal data either from you or any other person. Otherwise your contribution will not be published nor will, in principle, its content be taken into account.

View the consultation document and questionnaire

Consultation paper(161 Kb)

View the questionnaire

Questionnaire

Reference documents and other, related consultations

COM(2012)351 : Communication from the Commission to the European Parliament and the Council on concrete ways to reinforce the fight against tax fraud and tax evasion including in relation to third countries.

COM(2012)722 : Communication from the Commission to the European Parliament and the Council including an Action Plan to strengthen the fight against tax fraud and tax evasion.

Contact details

via A ‘European Taxpayer’s Code’ – European commission.

 

EUROPA – Press Release – Preparation of Economic and Finance Ministers Council, Brussels, 5 March

In EU development, Uncategorized on 03/03/2013 at 9:32 am

The EUs Council of Economic and Finance Ministers will take place on Tuesday, 5 March at 10.30. The European Commission will be represented by Olli Rehn, Vice President and Commissioner for Economic and Monetary Affairs and the Euro, Michel Barnier, Commissioner for Internal Market and Services and Algirdas Šemeta, Commissioner for Taxation and Customs Union. A press conference is expected to take place after the meeting.

Revised Capital Requirements rules CRD IV SDR

On 28 February, an informal trilogue reached a compromise on the elements of a legislative package to strengthen the regulation of the banking sector. The compromise has now to be submitted to the ECOFIN and the European Parliament for final approval. One more political trilogue may be necessary to endorse a final text which should be prepared in light of further work by a technical group. The proposed package would replace the current Capital Requirements Directives 2006/48 and 2006/49 with a Directive and a Regulation that would constitute another major step towards creating a sounder and safer financial system.

The Directive governs the access to deposit-taking activities while the Regulation establishes the prudential requirements that banks need to respect see ( IP/11/915).

The compromise that was reached in the informal trilogue required an effort from all sides in order to reach agreement. It includes provisions on capital and liquidity, with specific measures for systemically important financial institutions; the disclosure by banks on profits and taxes paid by country; and it regulates bonuses with a cap in relation to fixed salaries 1:1. Shareholders can increase this cap to 2:1. The regulation of bonuses is according to Commissioner Barnier key “to avoid unjustifiable and unjustified remuneration which has encouraged excessive risk-taking”.Commissioner Barnier will call upon ECOFIN to approve the elements of the political agreement that was reached.

More information

VAT Fraud: Quick Reaction Mechanism – Reverse Charge Mechanism (ET)

The Council will have a state of play discussion on anti VAT fraud measures including the Commission’s proposal for a Quick Reaction Mechanism (QRM) (see IP/12/868).The QRM is one of the key actions of the Commission’s plan to fight against tax fraud and evasion of 6 December 2012 (see IP/12/1325). The proposed QRM would significantly improve the chances of Member States to effectively tackling complex fraud schemes, such as carrousel fraud, and to reducing otherwise irreparable financial losses.

Economic Governance – “Two Pack” (SOC)

On 20 February the European Parliament and the Council reached an agreement during the “trilogue” on two new Regulations to further strengthen surveillance and coordination of economic and budgetary policy in the euro area (the so-called “Two-Pack”). Ministers are expected to endorse this agreement.

The Two-Pack builds on the Six-Pack set of EU laws which entered into force at the end of 2011 and which strengthens EU economic governance. The first Regulation aims to enhance budgetary coordination and ex-ante budgetary surveillance for all euro area Member States. To ensure budgetary deficits are corrected in a timely way, it also reinforces the monitoring of Member States under the Excessive Deficit Procedure. It is also a concrete way to enshrine some of the commitments of the Treaty on Stability, Coordination and Governance into EU law.

The second Regulation sets out explicit and simplified rules for enhanced surveillance for euro area Member States facing severe difficulties with regard to their financial stability, for those receiving financial assistance, as well as for Member States in the process of exiting such assistance.

Olli Rehn, Commission Vice-President for Economic and Monetary Affairs and the Euro recently said: “The trilogue agreement on the Two-Pack should pave the way for a completion of the legislative process in the next few weeks so that these two key Regulations can swiftly enter into force. This will mean that the euro area can already benefit from a more integrated and effective policy-setting framework for the 2014 budgetary cycle. The rebuilding and reinforcement of our Economic and Monetary Union is underway.”

European Semester – discussion of thematic issues – Report on quality of public finances (SOC)

As underlined in the Annual Growth Survey 2013, Member States should pursue differentiated and growth-friendly fiscal consolidation. Hence, cuts in more growth-friendly spending (such as education or research and development) should be avoided or minimised, savings should come from efficiency gains as much as possible and essential social safety nets should be safeguarded. This is the overarching objective behind the conclusions on the Commission’s staff report on the quality of public expenditure which is to be endorsed by the ECOFIN Council.

The report underlines the role of peer reviews and exchange of best practice among Member States. These should, in particular, cover measures to increase the efficiency of healthcare and budgetary processes and practices, bringing more ‘value for money’ in the public sector (for instance through spending reviews and performance-based budgeting). These peer reviews will not imply more red tape for Member States, as they would just build on existing EU processes to encompass efficiency alongside fiscal discipline.

Economic and Monetary Union European Semester – Response to President of European Council (SOC)

While a lot has already been done to improve and strengthen economic governance in the EU, weaknesses still exist. This is why it is necessary to re-design the architecture of the Economic and Monetary Union (EMU).

The potentially significant spill-over effects within the euro area that are associated with structural reforms at national level justify the introduction of further, ex ante, coordination in this area. In its Blueprint (IP/12/1272, MEMO/12/909), the Commission proposed contractual arrangements through targeted financial support. These arrangements are the missing link between the European Semester and the national semester. They will enhance national ownership of recommendations issued at EU level and contribute to the timely adoption and implementation of these key reforms.

As the Commission announced in its declaration on the Two-Pack, it will put forward proposals on ex ante coordination and the Convergence and Competitiveness Instrument before the end of this year.

Follow-up to G20 Meeting of Finance Ministers and Governors (Moscow, Russia) (SOC)

The Ecofin Council will be briefed on the main outcome of the G20 Finance Ministerial and Central Bank Governors’ meeting held in Moscow 15 – 16 February. This was the first meeting of Finance Ministers under the Russian G20 Presidency. Discussions in Moscow focused on the global economic situation and the actions needed to strengthen the global recovery. Ministers agreed that credible medium-term fiscal consolidation plans will have to be put in place, taking into account near-term economic conditions and fiscal space. Work will continue on developing credible medium-term fiscal plans in line with the commitments made by G20 Leaders in Los Cabos in June 2012. There was also confirmation of a cooperative approach on exchange rates in Moscow. There was general recognition of Europe’s anti-crisis actions which helped reduce tail risks to the global economy. G20 Ministers and Central Bank Governors also discussed issues related mainly to the international financial architecture and financial regulation.

Other items

The Irish Presidency will update the Finance Ministers on progress made in respect of some current legislative including:

Single Supervisory Mechanism

On 12-13 December 2012 the Council agreed a position on two proposals for a single supervisory mechanism (SSM) for banks. Trilogues have started in December 2012 and are continuing intensively in view of reaching a final agreement in March. The proposed new supervisory system with the ECB at its centre aims to strengthen the Economic and Monetary Union. The SSM is a key element of a fully-fledged banking union as it was laid out in the Commission’s Communication of 12 September 2012 and in the “Blueprint for a deep and genuine economic and monetary union” of 28 November 2012 (see IP/12/953 and IP/12/1272). In this context, Commissioner Barnier will welcome the Irish Presidency’s plan to reach agreement on this file as soon as possible in March and encourage all sides to work together constructively to make this possible.

More information

Revised rules for markets in financial instruments

In October 2011, the Commission adopted proposals for a review of the Markets in Financial Instruments Directive (MiFID) aimed at establishing safer, sounder, more transparent and more responsible financial markets that work for the economy and society as a whole. It will notably complement the on-going reform of EU derivatives markets by mandating the trading of standardised derivatives onto organised trading venues and by enhancing the transparency and oversight of derivatives markets including commodity markets in line with our G20 commitments. Commissioner Barnier will welcome the progress reached under the Cypriot Presidency on this review and support the Irish Presidency’s work to reach a general approach in the Council with the aim to start informal trilogue as soon as possible.

More information

Bank recovery and Resolution

The Presidency will debrief on the latest progress on the Bank Recovery and Resolution Directive.

Commissioner Barnier will reiterate that the Commission fully supports the efforts of the Presidency in reaching an agreement on this important proposal in line with timetable adopted by December European Council.

More information

via EUROPA – PRESS RELEASES – Press Release – Preparation of Economic and Finance Ministers Council, Brussels, 5 March.

 

Press Release European Commission – Speech – making progress on European Tax Policy: towards more fairness and greater competitiveness

In EU development on 16/01/2013 at 8:29 am

INSTITUTE OF INTERNATIONAL AND EUROPEAN AFFAIRS

Dublin, 11 January 2013

Ladies and Gentlemen,

Magnitude of the crisis and responses

The crisis that we are going through is the biggest economic crisis since 1929.

The European Union has reacted to this crisis by promoting fiscal discipline in Member States through the creation of the European Semester.

We also worked on the stability of financial markets by creating financial backstops, proposing a supervisory role for the European Central bank and launching the European Stability Mechanism.

In addition, and as a necessary companion to fiscal discipline, we put forward the EU 2020 Strategy and the Growth Compact to promote growth and jobs.

We now have the governance tools and rules to ensure that the EU as a whole can forge ahead on the path to recovery and growth.

Nonetheless, the outlook for this year is still weak and

2013 will continue to be challenging. We must sustain our commitment to recovery, deploy all necessary instruments and pull tighter together as a Union to emerge strong from this crisis.

Where does tax policy stand in this context?)

In this context, we must look at how tax policy can contribute to the consolidation and smart growth agenda of the EU.

In the Single Market, we should strive towards world class tax systems, which would put the EU at a decisive competitive advantage in the global economic arena.

We must create a tax environment which allows businesses to expand and create jobs, and attracts foreign investors.

We must cut compliance costs and red tape, so that businesses can invest what they save in bureaucracy in research, innovation and training.

We must also create a fair tax environment. One where it pays to work and where labour and capital, across all the sectors of the economy, would contribute a fair share to financing our European social and economic model.

So, how to progress on this road towards making the Single Market the best place in the world to do business? I believe that the answer is twofold:

  • First, we need to push, through the European Semester process, for appropriate tax reforms in Member States.

  • Second, Member States should speed up the adoption of the initiatives proposed by the Commission to strengthen the Single Market, which should become a reality also from the tax perspective.

Using the European Semester to improve the quality of tax systems in the Member States

An assessment of last year’s exercise

Let me start with a few words on our experience so far with taxation in the European Semester.

Over the last few months, there has been a general trend observed in the Member States towards fundamental tax reforms.

However, there is still scope to shift the overall tax burden towards tax bases that are less detrimental to growth and job creation.

Such a shift requires a package approach which ensures equitable redistribution and is adapted to the circumstances of the individual Member State.

This is why the Commission recommends that:

  • First, the tax burden on labour should be substantially reduced in countries where it is comparatively high and hampers job creation. To ensure that reforms are revenue neutral, taxes such as consumption tax, recurrent property tax and environmental taxes should be favoured.

  • Second, revenue should preferably be raised y by broadening tax bases rather than by increasing tax rates or creating new taxes;

  • Third, tax compliance should be improved by reducing the shadow economy, combatting tax evasion and ensuring greater efficiency in the tax administration.

  • Finally, the corporate tax bias towards debt-financing should be reduced and tax schemes which increase the debt bias of households should be reviewed to avoid financial risks.

Looking at the national tax reforms proposed so far, it is fair to say that, in general, Member states are following the recommendations made by the Commission.

In this context, I am aware that Ireland continues to make good progress, having met all the quarterly fiscal targets so far under the economic convergence programme.

I also note that most of the tax related elements of the budget presented by the Irish Government last December are well in line with what the Commission recommends for quality tax reforms, which is a good sign for the future.

But let me stress that, whether in Ireland or anywhere else in the EU, success relies on tax reforms which take into account two essential elements: competitiveness and fairness.

A more ambitious trend towards tax shifts and equity

For competitiveness, we know that job creation is fundamental. Therefore, the shift to more growth-friendly taxes is particularly important at a time where we need to use every possible measure to boost employment.

Our analysis of Member States’ tax reforms shows that more can be done to shift taxes away from labour towards consumption, environment or property taxation.

It is also time to put the emphasis on fairness.

The public acceptability of tax reforms depends greatly on how fair they are perceived to be. I will speak in a minute about what we are doing at EU level to this end.

But at national level, more efforts to address fraud and evasion will certainly contribute to fairer burden sharing for honest taxpayers.

The current pressure on public finances could also be turned into an opportunity for increasing the efficiency and effectiveness of the public administrations. In these difficult times, we need to get value-for-money, less expensive and more resilient administration.

A lot is to be done at national level and taxation reforms should benefit more from the e-government programmes in Member States.

Ladies and Gentlemen,

As you know, in the European Union, the main responsibility for tax reforms lies with the Member States. As long as they comply with EU law, they retain their full sovereignty to adapt their tax systems and tax rates to their national preferences and objectives. However, with our extremely interconnected economies, working in isolation doesn’t pay off.

I truly believe that there is immense added-value to tax coordination at EU level.

This can support national reforms and complement the actions of each country by, for example, tackling cross border bottlenecks and simplifying the tax environment for businesses.

Offering new opportunities for growth in the Single Market

This leads me to the second point I would like to raise today. For our common recovery, we must create a more business-friendly environment.

One in which companies can expand beyond their national markets and are not hindered by a patchwork of divergent national approaches to taxation.

(Fragmentation of the Single Market and competitiveness of the EU)

Improving the business tax environment is a central issue for competitiveness of the EU: Investors need stability, legal certainty, less administrative burden and less compliance costs. That is why I proposed a Common Consolidated Corporate Tax Base.

Its purpose is to offer cross-border businesses cheaper and easier access to the Single Market, not to introduce any tax rate harmonisation.

I also proposed a review of the directive on taxation of energy products. It would introduce a formula putting all fuels on an equal footing taxing them on the basis of their energy content and CO2 emissions.

This should avoid double taxation for businesses subject to the Emission’s Trading System and encourage the development of the green economy.

My contacts with the business community also confirm that one key element for a business-friendly environment is to cut red tape, decrease compliance costs and improve business cash flow.

We have taken all this into account in the VAT reform which I presented at the end of last year. Certain important measures have already been delivered. On 1 January, new EU invoicing rules came into force, which will make a big difference to the lives of business – both large and small.

They establish equal treatment between paper and electronic invoices, facilitating the uptake of e-invoicing. And they enable all Member States to authorise cash accounting for micro-businesses, which will make a huge difference to many SMEs in terms of cash-flow.

In other words, we are making sure that VAT rules do not leave the smallest businesses out of pocket, or struggling to make ends meet. The Commission will continue on this route this year, by presenting a proposal for standardising the VAT return.

Ensure fair taxation

Fairness is also an issue which we fully take into consideration in our initiatives at EU level. Our European social model is about combining economic dynamism with social fairness. And taxation plays a part in this model.

The essence of fairness lies in Member States being able to collect the taxes that are due, and all taxpayers paying their legitimate share.

I have briefly mentioned that Member States need to increase their efforts to tackle fraud and evasion at home. Likewise, more European coordination could substantially improve our fight against this problem.

Tax evasion and avoidance deprive Member States of up to €1 trillion every year.

This not only means the loss of much needed revenue, it also undermines fairness. Those who do pay their taxes must pay more, to compensate for the evaders. And competition between tax compliant businesses and their non-compliant counterparts becomes distorted.

With this in mind, in December, the Commission adopted an action plan to fight against tax fraud and tax evasion, along with recommendations to Member States for action. Allow me to briefly mention some of the actions which need quick progress:

  • First, Savings taxation: Member States must urgently agree on the reinforced Directive and mandate the Commission to review the related Agreement with Switzerland and other non EU European Countries;

  • Second, tax havens: Member States should implement a common definition of tax havens and black-list uncooperative jurisdictions;

  • Third, aggressive tax planning. Loopholes and mismatches in the Single Market should not lead to situations of “de facto” non-taxation. Member States should apply common measures to block opportunities for aggressive tax planners. They should reinforce their Double Tax Conventions and adopt a uniform General Anti-Abuse Rule, which would allow them to tax on the basis of real economic substance, and ignore artificial tax arrangements.

I can’t finish on this topic without mentioning a fundamentally fair tax which the Commission proposed last year and which currently is the source of much attention: the Financial Transaction tax.

We all know that Member States and the EU intervened massively to rescue the financial sector.

Meanwhile, this same sector carries a disproportionately lower tax burden than other sectors in our society.

The FTT will redress the balance, and ensure that the financial sector makes a fair contribution to public finances.

In addition to this, it will deliver significant new revenues that could be channelled into growth-promoting measures, for the benefit of all.

Agreement on the FTT has not been possible at 27. However, last year, the Commission received requests from 11 Member States to move ahead with a common FTT, under what we call the enhanced cooperation procedure.

Although Ireland is not one of these 11 Member States signed up to move ahead with the FTT, I am confident that it will facilitate progress during its Presidency. The European Council and our citizens have high expectations for quick results.

Conclusion

Ladies and Gentlemen,

Taxation has a major role to play in ensuring smart consolidation and sustainable growth in the EU.

Our goal must be to make the Single Market the best place in the world to do business; to become a benchmark for competitive and efficient tax systems.

The European Union is currently designing the deepening of the Euro and the forging a genuine Economic and Monetary Union.

Taxation cannot be avoided in this debate. The day of isolated tax policy is over.

Coming closer together as a Union on tax matters reinforces every Member States’ capacity to offer a sound and competitive business environment.

It helps our businesses, and attracts investment. And it strengthens our common position when addressing international challenges and spreading the principle of fair taxation abroad.

I therefore strongly believe that for taxation, as for other policy areas, the answer to our current challenges lies in more Europe, not less. And I am confident that the Irish presidency will push this agenda forward.

Thank you for your attention.

via EUROPA – PRESS RELEASES – Press Release – Speech – MAKING PROGRESS ON EUROPEAN TAX POLICY: TOWARDS MORE FAIRNESS AND GREATER COMPETITIVENESS.

 

Studies made for the European Commission: 2013

In EU development on 12/01/2013 at 1:17 pm

Studies made for the Commission: 2013

The study analyses and measures the issues arising from the current VAT treatment of public bodies and activities carried out in the public interest.

It also identifies possible options for the future, and measures their impact.

The views expressed by the contractor do not necessarily reflect those of the European Commission.

The Commission accepts no responsibility or liability whatsoever with regard to the information in this study.

The project ‘Effective tax rates in an enlarged European Union’ is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).

This study enhances the existing data by analysing the Effective Tax Rates in different industries.

The project ‘Effective tax rates in an enlarged European Union’ is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).

It extends the scope of the calculation of ETRs conducted under the study on effective levels of company taxation within an enlarged EU (2008).

The project includes a focus on the effects of tax reforms in the EU27 for the period 1998-2011 and their impact on the level of taxation for both domestic and cross-border investment.

via Studies made for the Commission – European commission.

 

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