All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

EU Commissioner Olli Rehn calls for unified EU tax policy

olli-rehn.jpg

Olli Rehn, European Union Economic and Monetary Affairs Commissioner, has called for greater harmonisation in EU taxation policy.

Rehn, in a televised interview with Yle TV1 on Saturday, praised Finland’s move to cut its corporate tax rate by four and a half percentage points to 20%, and suggested the EU should try to adopt a unified policy when it comes to taxation.

Finland was the only national economy in Europe to shift from surplus to deficit over the past few years, and Rehn believes the company tax cut will provide a boost to the country’s competitiveness.

“It is vital to foster the competitiveness of companies and thus the conditions of economic growth and employment in all European countries. This is a challenge in particular for Finland, because it is the only so-called surplus economy in Europe, which over the past few years has transformed into a deficit economy,” said Rehn.

Rehn renewed his calls for a unified EU tax policy, having previously said the abolition of tax havens will require greater harmonisation of taxation within the EU.

But efforts to achieve greater harmonisation have invariably failed to overcome obstacles such as feared loss of sovereignty. The common consolidated corporate tax base (CCCTB) and financial transaction tax (FTT) are examples of this, though the FTT is now being advanced by 11 member states under enhanced cooperation.

And Frederic Donnedieu de Vabres, chairman of Taxand, has identified national competition for investment (such as Finland’s corporate tax cut) as another hurdle for harmonisation.

However, the existence of obstacles has not curbed the appetite for harmonisation, particularly among certain EU countries such as France and Germany. The two nations have proposed a number of ideas for further convergence of tax policy.

The most recent incarnation of this drive sees France stepping up its efforts to increase European harmonisation and tackle tax evasion by reinforcing the exchange of banking information across the continent. Pierre Moscovici, the French Finance Minister, has proposed a European version of the US Foreign Account Tax Compliance Act (FATCA).

“I propose that there be an automatic exchange of information; a European FATCA,” Moscovici told Europe 1 radio.

Moscovici also said on Sunday that France would be putting forward a proposal regarding money laundering. No further details were provided, but the proposal will again be delivered in conjunction with Germany.

These developments will tie in with proposals from the European Commission, which launched a consultation on the formation of a European Taxpayer’s Code last month as part of its December Action Plan.

“This is part of the [Commission’s] Action Plan, which seeks to increase cooperation, trust and confidence both between and among administrations, and between administrations and taxpayers. The EU is embarking on this and promoting automatic information exchange as a standard,” said Bob van der Made, of PwC.

More from across our site

Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
But experts cast doubt on HMRC's data and believe COVID-19 would have increased the revenue shortfall.
EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
Multinationals are asking world leaders to put a scale on carbon pricing to tackle climate change at the 48th G7 summit in Germany, from June 26 to 28.
The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
This week the Biden administration has run into opposition over a proposal for a federal gas tax holiday, while the European Parliament has approved a plan for an EU carbon border mechanism.
12th annual awards announce winners
Businesses need to improve on data management to ensure tax departments become much more integrated, according to Microsoft’s chief digital officer at a KPMG event.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree