19 July 2019 <\/p>\n\n\n\n
The EU \nis meant to have very little power on tax. All Member States must \nunanimously approve any tax proposal. This puts small countries on a \nlevel playing field with large ones. The European Parliament, for its \npart, may only submit non-binding opinions to Member States on any new \ntax legislation. Despite these limitations, the EU has taken the lead on\n many tax matters in the last five years. We have compiled some of the \nmost significant tax achievements of the last mandate below.<\/p>\n\n\n\n
The previous European Parliament successfully mobilised public \nopinion, generated political momentum and put pressure on national \ngovernments. At the same time, it also provided the Commission with a \nstrong case for action. A number of tax-related proposals from past \nyears can be traced back to repeated calls and campaigns from the \nParliament. To name just a few, public country by country reporting \n(CBCR), the tax intermediaries Directive (\u2018DAC 6\u2019) and the whistleblower\n protection Directive.<\/p>\n\n\n\n
The departing European Commission, for its part, reacted to scandals \nsuch as Luxleaks and Panama Papers, and heeded the European Parliament\u2019s\n calls for action. The Commission\u2019s motivation was also bolstered by \nEurope-wide opinion polls that have repeatedly shown that one of areas \nwhere citizens want more EU action is on tax. The Commission would have \nbeen foolish not to act.<\/p>\n\n\n\n
And the Commission has been relatively successful in its efforts, \nwith 14 tax Directives adopted! For example, it managed to get EU Member\n States to agree on more extended exchange of tax information between \ntax administrations. It pushed through the anti-tax avoidance Directive \n(ATAD) that implements OECD BEPS into EU law. It established a list of \nnon-cooperative tax jurisdictions. And it has taken forward a number of \nkey VAT files, including on e-commerce. The list goes on.<\/p>\n\n\n\n
The Commission further demonstrated its ability to expand its tax \nreach into conventionally non-tax areas. Famously, the Commission\u2019s \ncompetition department (DG COMP) under the firm leadership of the Danish\n Commissioner Margarethe Vestager initiated several state aid \ninvestigations into EU Member States offering beneficial tax treatment \nto large multinationals.<\/p>\n\n\n\n
Tax professionals should expect nothing less from the next European \nParliament and Commission, who will continue to see tax policy as an \nopportune area to harness public support and deliver results.<\/p>\n\n\n\n
In our next tax blog, we will look into the future and try to discern what is on the menu for the next five years.<\/p>\n\n\n\n