Global Tax 50 2014: Margrethe Vestager
EU competition commissioner
The EU competition commissioner could not have expected to be thrust into the global debate on tax policy, but all that changed in June this year, when Joaquin Almunia, who stepped down from the role when his term came to an end in November, decided to open three in-depth investigations of whether tax rulings by three member states appeared to favour some multinationals but not all and so constituted illegal state aid. The holder of the tax portfolio would normally be responsible for the European Commission's approach to these issues, though the state aid impact on tax is an important aspect of the competition commissioner's role. When the 46 year old Dane, Margrethe Vestager, became competition commissioner on November 1, her determination to continue with the investigations of the rulings concerning Apple in Ireland, Fiat Finance and Trade in Luxembourg and Starbucks in the Netherlands made her position on the list of the Global Tax 50 for 2014 assured. She expects to be able to report in the second quarter of 2015. Then the eyes of the business world will be on her as what she concludes will be crucial in shaping how the EU tackles aggressive tax avoidance in future.
"I've been a legislator for many years," says Vestager, who was a member of the Danish Parliament between 2001 and this year. "One of the things I've learned there is about the importance of enforcement and what it means for good legislation."
She added she was privileged to hold the role of competition commissioner. "It is a great combination of policy and enforcement, being neutral, impartial and rigorous and to do that in ways that are visible and distinct, and influence the debate," she says.
Vestager is concerned that she and her staff are seen to be doing a proper job of determining whether these cases are selective tax rulings and so whether illegal state aid existed: "We need to be very strong and precise in looking at the issues."
The competition commissioner said she is working closely on the file with Pierre Moscovici, the tax commissioner and fellow Global Tax 50 2014 entrant. "He is working on the automatic exchange of tax rulings between member states. This is a concrete example of how enforcement and legislation can come together," Vestager says.
The Danish commissioner is not committing to more investigations on tax and state aid at this point. Something that may help her decide that are the so-called Luxleaks cache of documents of historical tax rulings in favour of companies in Luxembourg, which were analysed and published by the International Consortium of Investigative Journalists in November and December 2014.
"We will look at the Luxleaks for an overview of the information," Vestager says. "I don't know what direction that may take us. I haven't decided one way or another. We will take a structured approach. It's more important to take a structured approach and take it from there. If we don't, we could inconvenience a lot of people."
The investigations may be the most high-profile part of the new commissioner's work now, but there are other aspects to her role. "These investigations don't mean we will forget about anti-trust and other state aid matters," she says.
Vestager expects to be able to conclude the open state aid investigations in the first half of 2015. They have the potential to shape how the EU Commission tackles tax avoidance, as well as cost the companies concerned hundreds of millions of euros in taxes and penalties.
The Global Tax 50 2014
Gold tier (ranked in order of influence)
Silver tier (in alphabetic order)
Joaquín Almunia • Apple • Justice Patrick Boyle • CTPA • Joe Hockey • IMF • Arun Jaitley • Marius Kohl • Tizhong Liao • Kosie Louw • Pierre Moscovici • Michael Noonan • Wolfgang Schäuble • Algirdas Šemeta • Robert Stack
Bronze tier (in alphabetic order)
Shinzo Abe • Alberto Arenas • Piet Battiau • Monica Bhatia • Bitcoin • Bono • Warren Buffett • ECJ Translators • Eurodad • Hungarian protestors • Indian Special Investigation Team (SIT) • Chris Jordan • Armando Lara Yaffar • McKesson • Patrick Odier • OECD printing facilities • Pier Carlo Padoan • Mariano Rajoy • Najib Razak • Alex Salmond • Skandia • Tax Justice Network • Edward Troup • Margrethe Vestager • Heinz Zourek