|Pierre Moscovici is a new entry this year|
To add to the pressure, the Frenchman has big shoes to fill in the shape of the now-departed Lithuanian Algirdas Semeta, a three-time Global Tax 50 entrant. But Moscovici already has clear priorities in place. The newly-appointed Commissioner talks to International Tax Review's Matthew Gilleard about harmonisation efforts, the lessons he learnt during his time as French Finance Minister, and the role of tax in promoting growth and employment across Europe.
International Tax Review: Firstly, Commissioner, congratulations on your appointment and welcome to your new role. Can you talk me through the priorities for your tenure as European Commissioner for Economic and Financial Affairs, Taxation and Customs?
Pierre Moscovici: In the area of taxation and customs, my priorities are clear: to boost growth and employment in Europe, we need a single market that works well. The economic and social goals we want to achieve require efficient and fair taxation. That's why we need to fight tax fraud, tax evasion and aggressive tax planning. We need to close existing loopholes and ensure transparency and the automatic exchange of information. The financial transaction tax (FTT) and the common consolidated corporate tax base (CCCTB) are at the top of my agenda, together with the fight against tax fraud and the automatic exchange of information on tax rulings, on which we will come forward with a proposal early in the New Year.
But there are also other concrete examples of what we can do to achieve our goals, such as closing the loopholes in the Parent Subsidiary Directive, putting forward a proposal in 2015 for a long-awaited definitive VAT regime and putting in place the Union's new customs code by May 2016.
ITR: How has your experience at national level, as Minister of Finance, helped to prepare you for this role? In what ways are you expecting the role to differ and throw up new challenges?
PM: My experience as Minister of Finance has indeed been useful to help me prepare to become Commissioner. From May 2012 to April 2014, together with my European colleagues, I contributed to promoting the agenda for economic growth and structural reforms in Europe. I was active in the creation of the banking union, in promoting financial stability, in fighting against tax fraud and tax evasion, and in preserving the integrity of the eurozone.
In fact, most of my professional life has been oriented towards Europe, thus providing me with comprehensive knowledge of how the EU operates and how its functioning can be improved. Taking up the role of Commissioner is in line with my two-decades-long commitment to contribute to a better Europe.
The experience of being Commissioner, however, differs in many ways from that of being a Minister of Finance. I am proud to now serve the European general interest within the college of commissioners led by Jean-Claude Juncker. I will be acting on behalf of all 28 member states, defending a global vision, in an impartial manner.
My portfolios of economic and financial affairs and taxation are central to our desire to relaunch Europe towards growth, jobs, investment and competitiveness. Encouraging structural reforms and growth-friendly, credible fiscal policies, and designing a fairer and more transparent tax environment in Europe are among the first major challenges I will be working on. I will be fully engaged in this thrilling mission during the coming five years, and I am looking forward to helping deliver the results our citizens demand and deserve.
ITR: What do you consider to have been your biggest influence on tax during your time as French Finance Minister?
PM: The fight against tax fraud and tax evasion was always one of my top priorities during my time as French Finance Minister. I gave a political impulse to these challenges by launching concrete initiatives against aggressive tax planning and in favour of better tax transparency in Europe.
Within the G20, I called for a reinforcement of tax cooperation and promoted automatic exchange of information as a global standard. I defended a reinforced approach against tax havens, and acted towards the adoption of the FTT. A concrete achievement I am proud of is the law concerning the fight against tax fraud and economic and financial crimes, adopted in France in December 2013, which strengthened France's capacity to address tax fraud issues.
Europeans will no longer accept financial opacity, banking secrecy, tax fraud and corporate tax avoidance. These are key issues both for economic efficiency and fairness raisons. I am convinced that it is time for the European Commission to start a new era in these matters, both within the EU and in our international relations. As Commissioner, I will be an outspoken advocate of better regulation in the field of taxation.
ITR: During your time in government, you were pro-harmonisation, spearheading various initiatives alongside your German counterpart. Your statements of intent regarding FTT and CCCTB suggest you are looking to take this harmonisation theme forward as Commissioner – how confident are you of making significant progress in these areas? With the FTT going ahead under enhanced cooperation (and reports of smaller member states leveraging the bargaining power of the proposal teetering on the edge of the required number of states following Slovenia's departure), how will you ensure it keeps moving forward?
PM: I strongly support the 11 member states that have decided to create an FTT through enhanced cooperation. The Commission stands ready to provide them with technical support in designing the tax. Clearly, there are different views among member states regarding the scope of the first step and the application of the principle for the determination of the country that has the right to tax. Once these essential elements are agreed upon, we can further work on its practical implementation, such as on how to collect the tax, for which information technology, verification and administrative cooperation structures are needed.
To assist in such work, the Commission has contracted out a study that looks into tax collection issues and how to overcome the challenges of implementing such a broad-based framework for taxation. Member states should not miss the potential revenue from a harmonised FTT and I believe this tax can be introduced as from 2016.
As regards the proposal for a CCCTB, I believe new impulse should be given to the debate in the Council. This initiative can provide a very valuable tool against aggressive tax planning and tax evasion, and I am confident that Ministers will carefully evaluate its added value with fresh eyes.
ITR: You have hinted at a compulsory CCCTB. What has prompted this and do you see it as a possible route forward for achieving the aims of the CCCTB, given that progress on that front has stalled in recent years?
PM: The CCCTB was proposed in 2011 as an optional tax base for companies that are active across borders in Europe. It aims to reduce the costs of compliance with different ways of calculating the tax base and to ease their obligations that are routed in the tax control of intragroup transactions via so called transfer pricing rules.
Since 2011, member states' experts have been discussing the different aspects of the Commission's proposal, and they are progressing, step-by-step, with the technical work. However, since 2011 the tax landscape has changed and I believe that today the fight against tax evasion and aggressive tax planning is as important as the assistance companies deserve in simplifying their European tax administration. Keeping in mind the need for unanimity, we need to reflect on what is more suitable to achieve our goals: an optional CCCTB, as is currently on the table, or a compulsory one.
|The Global Tax 50 2014|
|View the full list and introduction|
|Gold tier (ranked in order of influence)|
1. Jean-Claude Juncker 2. Pascal Saint-Amans 3. Donato Raponi 4. ICIJ 5. Jacob Lew 6. George Osborne 7. Jun Wang 8. Inverting pharmaceuticals 9. Rished Bade 10. Will Morris
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
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