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Europaudvalget 2014-15 (1. samling)
EUU Alm.del Bilag 162
Offentligt

Bundesrninisterium

der Finanzen

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RÉPUBUQ..UE FRANçAISE

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Minbtero

dell'Economia

delle

Finanze

Mr Commissioner,

The lack of tax harmonisation in the European Union is one of the main causes allowing

aggressive tax planning, base erosion and profit shifting (BEPS) to deve!op within the internal

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directly affects the establishment or ftmctioning of the internal market and the benefits

provided by the Treaty freedoms.

Our citizens and our companies expect us to cope with tax avoidance and aggressive tax

planning.

is our common duty to meet their expectation by ensuring that everyone pays its

fair share of tax to the State where profits are generated.

Good progress has been made, especially dming the last six months, but now we need to do

more. Indeed, it is obvious that a turning point has been reached in the discussion on unfair tax

competition and base erosion and profit shifting within the EU, which result in undesirable

effects and undermine the realization of the internal market. Since certain tax practices of

countries

and taxpayers have become public recently, the limits of pe1missible tax competition

between Member States bave shifted. This development is irreversible.

fully appreciate the Cornmission's prompt reaction

with

the recent announcement of the

initiative regarding tax rulings. Now, no one can deny that

there

is a strong need for real action

and that we must collectively take necessary measures to ensure transparency and fair taxation.

In the context ofthe OECD/G20's final adoption of

the

BEPS conclusions by the end of 2015,

the appropriate response by the EU is the adoption of a set of common, binding rules on

corporate taxation to curb tax competition and fight aggressive tax planning.

We, Finance Ministers of France, Germany and Italy, are convinced that this can only be

reached

through a comprehensive anti-BEPS Directive, to be adopted by the 28 Member States

before end-2015. The diagnosis is made and the solutions are already known, so we should act

without

any delay.

Pierre MOSCOVICI

European Commissioner for Economie and Financial Affairs, Taxation and Customs

Europcan Commission

Rue de la Loi 200

1040 Brusscl

Belgique

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First, the lack of transparency between tax administrations fosters aggressive tax planning, as

their decisions may bave an impact on the location of the tax base within the internal market.

The Commission's proposal to make information exchanges on cross-border tax rulings

mandatory and automatic, which should also cover decisions relating to transfer pricing, is

necessary. Moreover, one should think about stricter conditions and rules for the issuance of

such unilatera! rulings.

In addition, we have a real opportunity to go further in this area. For instance, the EU law could

do more on trusts, shell companies and other non transparent entities, by establishing registers

or other mechanisms requiring that beneficiai owners are identified and available for tax

administrations. The directive should also include disclosure requirements for companies'

intra-European cross-border restructuring and other operations.

Second, transparency is not enough. We can surely not concede that situations where Treaty

freedoms are misused in order to avoid tax remain unaddressed. For this reason, the anti-BEPS

D_rective_ uld_ a_ eneral

principle__of_

sho_ s.et_ g_

eftèctive taxation.

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As a consequence, the exemptions provided for by the lnterest-Royalties and the Parent-

Subsidiary Directives should be denied if they lead to no effective taxation. On the issue of the

hybrid arrangements, it is particularly crucial to prevent double non-taxation in any sort of

cross border situation.

Consistently, the anti-BEPS Directive should ensure at the EU leve! that tax benefits are not

obtained through inappropriate arrangements. Thus, our work on a common genera! anti-abuse

provision has to be achieved and it must be incorporated into the EU law.

With respect to national provisions like Patent Boxes, we should build on the principle defined

by the OECD and the Code of Conduct Group and provide fora binding framework based on

common rules.

Last, the European Union needs to protect its internal market from tax avoidance through the

use of tax havens. The anti-BEPS Directive will be an opportunity to fix this issue through

counter-measures towards jurisdictions whose behaviour fosters non transparency and

aggressive tax planning. As regards the first point, the EU could take advantage of the work

performed by the Global Forum on Transparency and Exchange oflnformation.

This strong initiative taken by the EU, which could be proposed by the end of 2014, would give

Europe the leading place that it deserves at the international leve!. We will be able to take

advantage of it to obtain progress in the framework of the ongoing OECD/020 discussi on.

Yours sincerely,

Dr. Wolfgang SCHÀUBLE

Pier Carlo PADOAN