On 14 June, the ECOFIN Council endorsed a report to the European Council on various tax issues that were discussed under the Romanian Presidency. The following elements in this report may be of interest to members:
C(C)CTB
The Romanian Presidency continued work on this file in the same direction as the previous Presidency and elaborated compromise texts on chapters I to V. Since discussions on the technical core of these chapters could not deliver further progress, the Presidency extended work at technical level to chapters VI to IX.
The views of Member States’ delegations also continued to diverge on the cornerstone issue of whether or not to extend the CCTB scope to all corporate income taxpayers, which undermines further progress at technical level. A majority of delegations continue indeed to either oppose or have reservations to such extension, whilst a number of delegations – including the French and German delegations, who presented a joint position paper on the CCTB proposal in 2018 – hold the opposite view or remain undecided. The most recent compromise text is available here.
Digital taxation
On 12 March 2019 the Romanian Presidency brought the DAT to the ECOFIN Council for political agreement. In the absence of agreement within the Council, the Presidency suggested that work continues on the basis of a two-track approach:
- The Council and the Member States jointly continue to work towards an agreement on a global solution at OECD level by 2020 to address the tax challenges of the digitalization of the economy. The Presidency will do its utmost to facilitate discussions while examining also the proposal on the Significant Digital Presence.
- In the event that by the end of 2020 it appears that the agreement at OECD level is bound to take more time, the Council could, as necessary, revert to discussing DAT/DSTD and the possible EU approach to the tax-related challenges arising from digitalisation.
Commission communication on transition from unanimity vote in EU tax policy
Some delegations expressed their overall support for the main points set out in the Commission Communication. However, a large number of delegations attach great importance to the rule of unanimity in the area of taxation and deem it not appropriate to change the current voting rules as regards EU tax policy. Many delegations also referred to the speedy agreements that led to adoption of a considerable number of legislative proposals in the
area of EU tax policy in recent years. The importance of taxation for the sovereignty of Member States and the central roles of national parliaments was underlined on repeated occasions.
FTT
At the HLWP meeting of 7 May 2019, participating Member States indicated that they are discussing about an option of an FTT based on the French model of the tax and about the possible mutualisation of the revenues among the participating Member States as a contribution to the EU budget. The ECOFIN on 14 June 2019 was informed of the state of play of this file. In this context, France and Germany circulated a letter and a proposal for mutualisation of revenues from the FTT. During discussions on the scope of the tax, Belgium, Slovakia and Italy argued in favour of exempting pension funds from the FTT.