European Council

As I have emphasized for many months, in fact from the very beginning of the migration crisis, there is no good alternative to border protection. And this is why I welcome with great satisfaction the European Commission's proposal of strengthening our external borders, because in fact border control is a conditio sine qua non of each and every migration policy. 

Border protection is and should be in the first place the domain of national states. This is why we have to analyse the most controversial idea of the European Border Guard entering the territory of sovereign states.

But Europe cannot remain vulnerable when Schengen states are not able to effectively protect their borders. If we reject the Commission's proposal, we will have to find another, but I'm afraid, an equally painful solution.

Also crucial is of course the UK issue. The consultations I have led with all Member States show good will of all the parties involved, but it doesn't change the fact that some parts of the British proposal seem unacceptable. However, if Prime Minister Cameron persuades leaders tonight that we can work together to find solutions regarding all four baskets, then we will have a real chance to strike a deal in February.

And finally, on EMU. Even if Europe is overwhelmed by the migration crisis today, we cannot afford to wait with the necessary reforms for better days. This summit should make clear whether Member States are ready to take difficult decisions on the Banking Union and economic governance.

In order to tackle the unprecedented flows of refugees in 2015, the EU has set out a comprehensive strategy and is fully engaged in solving the most pressing issues. On the basis of the strategic orientations set out by the European Council and by the Council, the Presidency has assigned itself four priorities:

(a)    Providing assistance to those in need: humanitarian situation, civil protection, etc.
(b)   Stemming the migration flows: cooperating with third countries, prevent/deter, actions against smugglers, targeted communication, etc.
(c)    Strengthening the capacity at entry: hotspots, entry points, registration, security, border cooperation, etc.
(d)   Managing the flows within internal borders: processing including screening, security checks, reception, asylum, relocation, return, etc.

The Presidency has held numerous meetings and consultations, conducted field visits and activated the Integrated Political Crisis Response (IPCR) for the first time ever (cf. annex). Member States, the Commission, the EEAS and relevant EU agencies have been fully mobilised to support the Council in taking decisions on actions to meet the needs of arriving refugees and migrants, including the 1.2 million asylum seekers that have arrived since January 2015 (+ 90% than in 2014) in the EU. Implementation has been advancing rapidly in some areas, but significant gaps still remain.

Dear President Poroshenko, Dear President Juncker. Dear Petro and Jean-Claude,

One year ago when I hosted my first European Council, EU leaders pledged to stay the course on Ukraine. And we have done so, working to help stabilise the situation and making sure that Ukraine's own efforts are transforming the country in a positive direction.

Our policy of non-recognition of the illegal annexation of Crimea and Sevastopol is in force. And our economic sanctions against Russia will remain linked to the complete fulfilment of the Minsk Agreements.

Beyond the crisis, the European Union has been supporting Ukraine in its ambitious, and absolutely crucial, agenda of political and economic reforms. Reforms have started to bring results, but still we continue to expect a lot from the Ukrainian authorities in the months to come.

We are lending economic and technical support and have engaged, through the efforts of Jean-Claude and the Commission, on securing Ukraine's energy supplies. We are making sure that the Deep and Comprehensive Free Trade Agreement will enter into force as smoothly as possible from the 1st of January next year. This will lead to the gradual economic integration of Ukraine in the EU internal market.

Finally, Ukraine has made good progress over past months with regard to visa liberalisation, which should allow us to advance towards a visa-free regime as soon as possible. I hope we can find an agreement on the outstanding issues this evening.

To sum up. Europe will stay the course. Ukraine must stay the course of reforms. And Russia must change its course.  

VI. United Kingdom

20. The European Council had a political exchange of views on the UK plans for an (in/out) referendum. Following today's substantive and constructive debate, the members of the European Council agreed to work closely together to find mutually satisfactory solutions in all the four areas at the European Council meeting on 18-19 February 2016.

Full text of the European Council conclusions available here:

 

I. Migration

1. Over the past months, the European Council has developed a strategy aimed at stemming the unprecedented migratory flows Europe is facing. However, implementation is insufficient and has to be speeded up. For the integrity of Schengen to be safeguarded it is indispensable to regain control over the external borders. Deficiencies, notably as regards hotspots, relocation and returns, must be rapidly addressed. The EU institutions and the Member States must urgently: 

a) address the shortcomings at the Schengen external borders, notably by ensuring systematic security checks with relevant databases, and prevent document fraud;

b) address deficiencies in the functioning of hotspots, including by establishing the necessary reception capacity to achieve their objectives; rapidly agree a precise calendar for further hotspots to become operational; ensure that Frontex and EASO have the necessary expertise and equipment; 

c) ensure systematic and complete identification, registration and fingerprinting, and take measures to tackle refusal of registration and stem irregular secondary flows;

d) implement relocation decisions as well as consider including among the beneficiaries of existing decisions other Member States under high pressure who have requested this;

e) take concrete measures to ensure the actual return and readmission of people not authorised to stay and provide support to Member States as regards return operations;

f) enhance measures for fighting smuggling and trafficking of human beings;

g) ensure implementation and operational follow up to:

• the High Level Conference on the Eastern Mediterranean - Western Balkans route; in this context, it is important to help non EU Member States along the Western Balkans route to accomplish registration according to EU standards; 
• the Valletta Summit, particularly as regards returns and readmission, and
• the EU-Turkey Statement of 29 November 2015 and the EU-Turkey Action Plan; in this context COREPER is asked to rapidly conclude its work on how to mobilise the 3 billion euro for the Turkey Refugee Facility;

h) continue implementing the agreed resettlement scheme;

i) continue to closely monitor flows along migration routes so as to be able to rapidly react to developments.

2. The Council should continue work on the crisis relocation mechanism taking into account experience gained, and rapidly decide on its position on the list of safe countries of origin. The Council is invited to rapidly examine the situation concerning Afghanistan. The Council should rapidly examine the Commission proposals of 15 December on a "European Border and Coast Guard", the Schengen Borders Code, "A voluntary humanitarian admission scheme", and travel documents for returns. The Council should adopt its position on the "European Border and Coast Guard" under the Netherlands Presidency. The Commission will rapidly present the review of the Dublin system; in the meantime, existing rules must be implemented. It will also soon present a revised proposal on Smart Borders.

3. The Presidency, the Commission and the High Representative will report back on progress before the February meeting of the European Council.

On 16 December 2015, under the Luxembourg Presidency and subject to the European Parliament and Council formal vote, the Special Committee on Agriculture (SCA) approved a final compromise on a proposal for regulation on school milk, fruit and vegetables scheme.

The Council and the European Parliament representatives identified the overall compromise during a trilogue meeting held on 10 December. On the same occasion the SCA approved a Council Regulation on the same subject, which completes the school scheme, notably as regards the fixing of the EU aid.

Promotion of certain foods for public health

School schemes were originally established in order to promote the consumption of fruit and vegetable and milk products, beneficial in the public health context and are suitable for the distribution to school children. In addition, those sectors are also important for the EU agriculture. Under these schemes EU aid is allocated to member states for the supply of those products in educational establishments. 

The school fruit and vegetables scheme and the school milk scheme are currently separate programmes. In January 2014, the Commission made a proposal merging the schemes and amending the new single Common Market Organisation (single CMO) regulation under the reformed Common Agricultural Policy (CAP) (5958/14) and the regulation fixing certain aids and refunds (6054/14). The new scheme will have an overall yearly budget of €250 millions (milk products: €100 millions; fruit and vegetables: €150 millions).

The next steps

The European Parliament is expected to vote the compromise text at a meeting of its Committee on Agriculture and Rural Development in late January.

The Chairman of the SCA, for the Presidency, will send a letter to the Chairman of the European Parliament's Committee on Agriculture and Rural Development. This letter indicates that if the Parliament votes at its plenary session the compromise texts as approved by the SCA, after legal-linguistic revision, the Council will be able to reach agreement with the European Parliament on school milk, fruit and vegetables schemes in first reading. This should enable the entry into force of the new scheme in Spring 2016 and its application from August 2017.

On 16 December 2015, the Permanent Representatives Committee (Coreper) approved a compromise text agreed with the European Parliament on a directive on procedural safeguards for children in criminal proceedings. 

The purpose of the directive is to provide procedural safeguards for children (meaning persons below 18) who are suspected or accused of having committed a criminal offence. The directive will provide additional safeguards to those that already apply to suspects and accused adults.

Félix Braz, Luxembourg Minister for Justice and President of the Council said: "The agreement reached with the European Parliament is an important step forward for the European judicial area. This is the first binding instrument in this area and is a real breakthrough, particularly as regards the assistance of children by a lawyer. The new directive will contribute to enhancing mutual trust between the judicial systems of the Union." 

A core provision of the directive relates to the assistance by a lawyer. Member states should make sure that the child is assisted by a lawyer, where necessary by providing legal aid.  Other important provisions of the directive concern the provision of information on rights, the right to have an individual assessment, the right to a medical examination, and the right to audio-visual recording of questioning. It also provides special safeguards for children during deprivation of liberty, in particular during detention.

Next steps

The text of the directive will now be revised by legal-linguists, and will subsequently be submitted to the plenary of the European Parliament and to the Council for adoption.

Background

Since 2009, the work in the European Union on strengthening procedural rights for suspects and accused persons in criminal proceedings has been carried out on the basis of the roadmap, which was adopted by the Council on 30 November 2009. The roadmap sets out a gradual approach towards establishing a full catalogue of procedural rights for suspects and accused persons in criminal proceedings. The European Council has made the roadmap part of the Stockholm programme, in which explicit reference was made to a measure on the presumption of innocence. 

Three directives have already been adopted on the basis of the roadmap: Directive 2010/64/EU on the right to interpretation and translation in criminal proceedings, Directive 2012/13/EU on the right to information in criminal proceedings, and Directive 2013/48/EU on the right of access to a lawyer in criminal proceedings and in European arrest warrant proceedings, and on the right to have a third party informed upon deprivation of liberty and to communicate with third persons and with consular authorities while deprived of liberty.  Recently, another directive has been agreed, on the presumption of innocence.

Place:        Justus Lipsius building, Brussels
Chairs:      François Bausch, Luxembourg's Minister for Sustainable Development and Infrastructure
                   Xavier Bettel, Luxembourg's Prime Minister and Minister for Communications and the Media

All times are approximate and subject to change 

Thursday 10 December - Transport

 +/- 09.35
Doorstep by Minister Bausch

+/- 10.00
Beginning of Council meeting (Roundtable)
Adoption of the agenda
Adoption of legislative A items (public session)
Adoption of non-legislative legislative A items

Social aspects in road transport (poss. public session)

+/- 11.55
Any other business
a)     Presentation of the state of the Energy Union (poss. public session)
b)     An Aviation Strategy for Europe (poss. public session)
c)     Outcome of the investigation into the crash of flight MH17
d)     Election of the Council (2016-19) of the International Civil Aviation Organisation (ICAO)
e)     State of ratification of the Luxembourg Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Railway Rolling Stock (poss. public session)
f)      Transport security (poss. public session)
g)     Work programme of the incoming presidency (poss. public session)

+/- 14.30
Press conference (live streaming)

Friday 11 December - Telecommunications

 +/- 08.55
Doorstep by Prime Minister Bettel

+/- 10.00
Beginning of Council meeting (Roundtable)

Accessibility of public sector bodies' websites (public session)

Measures to ensure a high common level of network and information security across the Union (public session)

EU regulatory framework for electronic communications networks and services (poss. public session)

Any other business
a)     Internet governance
b)     Transatlantic Trade and Investment Partnership Agreement (TTIP):  negotiations on the information society and telecommunications component
c)     Work programme of the incoming presidency

+/- 13.00
Press conference (live streaming)

On 9 December 2015, the Permanent Representatives Committee approved, on behalf of the Council, a compromise agreed with the European Parliament on new rules aimed at ensuring greater accuracy and integrity of benchmarks in financial instruments.

"The adoption of this regulation will help restore trust in the integrity of benchmarks and enhance their robustness and reliability, thereby strengthening confidence in the financial markets and preventing new manipulation scandals," said Pierre Gramegna, minister for finance of Luxembourg and president of the Council.

The agreement with the Parliament was reached during a trilogue meeting in Strasbourg on 24 November 2014. Council and Parliament representatives have held seven trilogue meetings since agreeing their respective negotiating positions in February and May 2014.

Benchmark manipulation

Recent cases of manipulation of interest rate benchmarks such as Libor and Euribor have highlighted the importance of benchmarks and their vulnerabilities. The pricing of many financial instruments and financial contracts depends on the accuracy of benchmarks. Doubts about the integrity of indices used as benchmarks can undermine market confidence, cause losses to consumers and investors and distort the real economy. 

Objectives

Benchmarks are susceptible to manipulation where conflicts of interest and discretion exist and where these are not properly supervised. The regulation has the following objectives:

• Improving governance and controls over the benchmark process, in particular to ensure that administrators avoid conflicts of interest, or at least manage them adequately;
• Improving the quality of input data and methodologies used by benchmark administrators;
• Ensuring that contributors to benchmarks and the data they provide are subject to adequate controls, in particular to avoid conflicts of interest;
• Protecting consumers and investors through greater transparency and adequate rights of redress.

The regulation

The regulation will introduce a legally-binding code of conduct for contributors (of data) requiring the use of robust methodologies and sufficient and reliable data. In particular, it calls for the use of actual transaction input data where possible. But other data may be used if the transaction data is insufficient.

The scope of the regulation is broad, although benchmarks deemed to be critical will be subject to stricter rules, including the power for the relevant competent authority to mandate contributions of input data. The regulation will not apply to the provision of benchmarks by central banks, and, in certain circumstances, by central counterparties and public authorities. 

Administrators of benchmarks will have to apply for authorisation and will be subject to supervision by the competent authority of the country in which they are located.  If an administrator does not comply with the provisions of the regulation, the competent authority may withdraw or suspend its authorisation. Administrators will be required to have in place appropriate governance arrangements and controls to avoid conflicts of interest.

The European Securities and Markets Authority (ESMA) will coordinate the  supervision of benchmark administrators by national competent authorities. For critical benchmarks, a college of national supervisors including ESMA will be set up and take key decisions. 

Three categories of benchmarks

Benchmarks will be subject to requirements appropriate to their size and nature, while at the same time respecting a core set of minimum requirements in line with the internationally agreed principles of the International Organization of Securities Commissions (IOSCO).

Critical benchmarks: Those used as a reference for financial instruments or financial contracts or for the determination of the performance of investment funds having a total value of at least €500bn on the basis of all the range of maturities of the benchmark; or benchmarks based on submissions by contributors mainly located in one member state and recognized as being critical in that member state. Benchmarks of at least €400bn can also be considered critical if they have no or very few appropriate market-led substitutes, and  if their absence would have significant and adverse impacts on markets integrity, financial stability, consumers, the real economy, or the financing of households and corporations.

Significant benchmarks used as a reference for financial instruments or financial contracts or for the determination of the performance of investments funds having a total average value of at least €50bn on the basis of all the range of maturities or tenors of the benchmark over a period of six months. Benchmarks below this threshold can be upgraded if they have a significant impact on the markets, with no or few market-led substitutes.

Non-significant benchmarks are subject to a light regulatory regime based a comply-or-explain mechanism, i.e. general principles in line with the internationally agreed IOSCO principles.

Separate regimes

However, specific regimes will apply to commodity, interest rate and regulated data benchmarks:

• Commodity benchmarks of more than €100m are subject to the principles for oil price reporting agencies (PRA) issued by the IOSCO on 5 October 2012. These principles serve as a global standard for regulatory requirements for benchmarks. They were endorsed by the G20 in 2012 and cover governance structures, controls, integrity, and conflict management.
• Interest rate benchmarks, which are more prone to conflicts of interest and data manipulation, are subject to additional requirements relating to input data and contributors as these benchmarks.
• Regulated data benchmarks are exempt from some requirements as the nature of the data that is used in the determination of such benchmarks is less subject to manipulation and conflicts of interest.

Third country regime

Benchmarks provided by non-EU countries will be used by supervised entities in the EU through “recognition” or “endorsement” regimes, based on compliance with the IOSCO principles.

Moreover, a partial equivalence regime will facilitate equivalence with regard to third countries which do not intend in the foreseeable future to put in place a fully-fledged regime for all types of benchmarks, but which have put or may put in place specific rules for certain types of benchmarks or benchmark administrators, such as certain interest rate benchmarks.

Adopting the regulation

The regulation will now be submitted to the European Parliament for a vote at first reading, and to the Council for final adoption.

On 8 December 2015, the European Union and San Marino signed an agreement aimed at improving tax compliance by private savers. 

The agreement will contribute to efforts to clamp down on tax evasion, by requiring the EU member states and San Marino to exchange information automatically. 

This will allow their tax administrations improved cross-border access to information on the financial accounts of each other's residents. 

Upgrade

The agreement upgrades a 2004 agreement that ensured that San Marino applied measures equivalent to those in an EU directive on the taxation of savings income. The aim is to extend the automatic exchange of information on financial accounts in order to prevent taxpayers from hiding capital representing income or assets for which tax has not been paid.

"The sharing of information between national tax authorities remains one of the fundamental elements of an effective fight against tax fraud and tax evasion. The EU is undoubtedly a leader in this field."

Pierre Gramegna, Minister for Finance of Luxembourg

The text was signed in Brussels: 

• on behalf of the EU, by Pierre Gramegna, minister for finance of Luxembourg and president of the Council;
• on behalf of San Marino, by Antonella Benedettini, ambassador, head of mission.

The signature took place in the presence of Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, who also signed the document. 

Decision 

The Council adopted a decision on 8 December 2015 to authorise the signature on behalf of the EU.

"The sharing of information between national tax authorities remains one of the fundamental elements of an effective fight against tax fraud and tax evasion", Mr Gramegna said. "The EU is undoubtedly a leader in this field."

The EU and the OECD 

The agreement ensures that San Marino applies strengthened measures that are equivalent to measures in force in the EU. However, whereas the 2004 agreement was based on the EU's taxation savings directive, that directive has now been repealed. Directive 2003/48/EC was repealed on 10 November 2015 in order to eliminate an overlap with directive 2014/107/EU, which includes strengthened provisions to prevent tax evasion. 

The agreement also complies with the automatic exchange of financial account information promoted by a 2014 OECD global standard. 

The EU signed similar agreements with Switzerland, on 27 May 2015, and with Liechtenstein on 28 October 2015. It approved the conclusion of those agreements on 8 December 2015. 

Coverage 

It sets out to limit the opportunities for taxpayers to avoid being reported to the tax authorities by shifting assets. Information to be exchanged concerns not only income such as interest and dividends, but also account balances and proceeds from the sale of financial assets.

Tax administrations in the member states and in San Marino will be able to:

• identify correctly and unequivocally the taxpayers concerned;
• administer and enforce their tax laws in cross-border situations;
• assess the likelihood of tax evasion being perpetrated;
• avoid unnecessary further investigations.

The EU and San Marino must now ratify or approve the agreement in time to enable its entry into force. Provisional application is scheduled for 1 January 2016.

The Council:  

1. NOTES that effective corporate taxation can be undermined by base erosion and profit shifting;
2. STRESSES that unfair tax competition between Member States as well as between the latter and third countries could affect the functioning of the Single Market, whilst acknowledging the importance of taxation for competitiveness;
3. RECALLS and CONFIRMS the European Council conclusions of 18 December 2014 stating the urgent need to advance efforts in the fight against tax avoidance and aggressive tax planning, both at the global and EU levels;
4. RECALLS the European Council Conclusions of 13 and 14 March 2013 on the need for close cooperation with the OECD and the G20 to develop internationally agreed standards for the prevention of BEPS and in particular its call for the European Union to coordinate its positions;
5. HIGHLIGHTS the recent political agreement reached by the Council on automatic exchange of information of tax rulings and the pioneer role of the European Union in this field in fully implementing OECD BEPS conclusions on Action 5 (harmful tax practices);
6. WELCOMES the conclusions of the OECD Base Erosion and Profit Shifting (BEPS) Action Plan, as recently endorsed by G20 Finance Ministers in Lima, Peru, on 8 October 2015 and G20 Heads of State in Antalya, Turkey, on 15-16 November 2015;
   
   Implementation of OECD BEPS conclusions
   
   
7. NOTES that G20 Finance Ministers renewed on 8 October 2015 a commitment for swift, global and efficient implementation of BEPS conclusions and asked the OECD to prepare an inclusive monitoring framework by early-2016;
8. INDICATES that several legislative proposals linked to the BEPS agenda are currently under discussion in the Council, notably the proposal for a Common Consolidated Corporate Tax Base (CCCTB) and the recast of the Interest and Royalties Directive (IRD);
9. UNDERLINES furthermore that the Code of Conduct Group on business taxation established in 1998 continues to perform important non-legislative work in combating BEPS phenomena both inside the European Union and towards third countries;
10. STRESSES therefore the need to find common, yet flexible, solutions at the EU level consistent with OECD BEPS conclusions, paying specific attention to compliance with EU Treaty freedoms and competences and SUPPORTS an effective, swift and coordinated implementation by Member States of the anti-BEPS measures to be adopted at EU level;
11. OBSERVES that OECD BEPS conclusions often propose different options for implementing certain of its recommendations and that a common approach at EU level in favour of certain options would bring value with a view to ensure the proper functioning of the Single Market;
12. CONSIDERS that EU directives should be, where appropriate, the preferred vehicle for implementing OECD BEPS conclusions in the EU in order to ensure both legal certainty and proportionality in the level of harmonisation required by the Single Market;
13. AGREES in this respect that where the implementation of an OECD BEPS conclusion is foreseen through EU legislation this process is given priority over possible parallel soft-law discussions;
14. UNDERLINES at the same time the role that can be played by the Code of Conduct Group in providing guidance to Member States for implementing certain other OECD BEPS conclusions;
15. INVITES the Council's High Level Working Party on Tax Questions (HLWP) to closely monitor the implementation of the anti-BEPS actions at EU level and, more generally, to play a central role in overseeing work in this field, as it has done so far, including through 6-monthly Presidency BEPS roadmaps when presented;
    
    Implementation of BEPS conclusions through EU legislation
    
    
16. TAKES NOTE of the Commission's expert group final report on the taxation of the digital economy (May 2014) and of the subsequent OECD BEPS conclusions on Action 1, as well as of the Commission's intention to revise in 2016 value added tax (VAT) rules in the context of its 'Digital Agenda for Europe' initiative;
17. RECALLS that OECD BEPS conclusions on Actions 2 (hybrid mismatches), 3 (Controlled Foreign Company rules), 4 (interest limitation rules), 6 (general anti-abuse rule), 7 (permanent establishment status) and 13 (country by country reporting) might be implemented, following further technical analysis, through legislative proposals focusing on international anti-BEPS aspects, without precluding the application by Member States of domestic or agreement-based provisions aimed at preventing BEPS;
18. INVITES therefore the Commission to come forward with a proposal on these international aspects which takes fully into account the work done on these issues in the frame of the on-going legislative files, notably CCCTB;
19. NOTES that the insertion of a common anti-abuse clause is envisaged in the context of the recast of the Interest and Royalties Directive, following the insertion of a similar clause in the Parent-Subsidiary Directive, on the basis notably of OECD BEPS conclusions on Action 6;
20. ACKNOWLEDGES the need for further discussion on the concept of minimum effective taxation, in particular within the recast of the Interest and Royalties Directive;
21. INVITES the Commission to reflect on possibilities to improve the availability of corporate taxation data and statistics at the EU level on the basis of OECD BEPS conclusions on Action 11;
    
    A complementary 'soft law' approach
    
    
22. NOTES that OECD BEPS conclusions on OECD Action 2 (neutralising the effects of hybrid mismatch arrangements) are being taken into account for ongoing works of the subgroup on hybrid mismatches of the Code of Conduct Group and  INVITES the Code of Conduct Group and the Subgroup to discuss the forms of hybrid mismatches which are not addressed  through EU legislation;
23. RECALLS its previous endorsement of the modified nexus approach (doc. 16846/14) and INVITES the Code of Conduct Group to follow this approach, as outlined in OECD BEPS conclusions on Action 5 (harmful tax practices), for monitoring the legislative processes necessary for Member States to change their existing 'patent box' regimes;
24. INVITES the Code of Conduct Group to assess the opportunity, in the light of the fourth criterion, of developing EU guidance for implementing OECD BEPS conclusions on Actions 8-9-10 (aligning transfer pricing outcomes with value creation) and on Action 13 (Guidance on transfer pricing Documentation), with the support of the Commission and its advisory bodies, notably the EU Joint Transfer Pricing Forum;
25. INVITES equally the Code of Conduct Group to assess the opportunity of developing EU guidance for implementing OECD BEPS conclusions on Action 12 (disclosure of aggressive tax planning), notably with a view to facilitate exchange of such information between tax authorities;
    
    Other implementation issues
    
    
26. NOTES that certain OECD BEPS conclusions concern bilateral double taxation agreements entered into by Member States and CONSIDERS that some form of exchange of views through the HLWP would in this respect be useful;
27. STRESSES the need for a swift and efficient implementation of OECD BEPS conclusions also at global level and LOOKS FORWARD to the multilateral instrument to modify tax treaties envisaged under OECD BEPS conclusions on Action 15 expected by the end of 2016;
28. UNDERLINES the importance of involving a maximum number of countries, including developing countries, in order to ensure a level playing field in the area of BEPS. 

European Council meeting will take place on 17-18 December 2015 in Justus Lipsius building in Brussels. 

Journalists who have not yet applied for accreditation may apply online for last-minute accreditation:

You will receive an acknowledgement of receipt by email.

Journalists, who hold a 6-month badge (1.7.2015 - 31.12.2015) do not need to register.

Please note that due to the current security situation in Belgium, specific security measures have been put in place for last minute accreditation requests.

Media representatives applying to attend a European Summit for the first time or who have not been fully security screened in the last 18 months (i.e. have not attended a summit in the last 18 months or had registered last minute) will be the subject of a comprehensive and detailed verification by our security service.

Considering the time and resources needed for these verifications, not all requests may be processed. Media are therefore advised to avoid sending representatives falling into these categories. 

The Council: 

1. RECALLS its determination to combat tax fraud, tax evasion and aggressive tax planning at EU and global level;
2. RECALLS the adoption by the Council and the representatives of the Governments of the Member States, meeting within the Council, in December 1997 of a resolution on a Code of conduct for business taxation (hereafter "the Code");
3. RECALLS the subsequent establishment in March 1998 of a Code of Conduct Group (hereafter "the Group") to assess the tax measures falling within the scope of the Code and oversee the provision of information on these measures;
4. UNDERLINES that the May 2013 European Council conclusions noted that “it is important to continue work within the EU on the elimination of harmful tax measures. To that end, work should be carried out on the strengthening of the Code of Conduct on business taxation on the basis of its existing mandate”;
5. RECALLS  the usefulness and the efficiency of the work done under the Code of Conduct so far to assess Member States individual tax measures;
6. CONFIRMS that work on the future of the Code of Conduct and its reinforcement should focus on making better use of the existing mandate of the Code; on examining the possibilities and modalities to extend the mandate and to update the criteria and on the possible need to adjust the governance of the Code accordingly;
7. ENDORSES the Group's new Work Package, and ENCOURAGES the Group to continue its work on that basis;
8. CONFIRMS its invitation to the Group to develop general guidance to prevent tax avoidance, base erosion and profit shifting (BEPS);
9. INVITES the High Level Working Party on Taxation (HLWP) to discuss a revision to the mandate in relation to the concept that profits are subject, as appropriate, to an effective level of tax within the EU, notwithstanding the competencies of Member States in the area of taxation;
10. AGREES that the rollback and standstill procedures foreseen in paragraphs C and D of the Code should cover existing and future general guidance notes developed by the Group;
11. INVITES in this respect the Group to ensure through such general guidance an effective implementation at the EU level of the relevant OECD BEPS Project conclusions when not covered by the EU legislation, and in accordance with the Group's new Work Program;
12. AGREES that the Code Group should clarify the third criterion by developing guidance on the basis of the OECD BEPS conclusion on  Action 5;
13. AGREES that the Code Group should clarify the fourth criterion by developing guidance  in the light of OECD Transfer Pricing Guidelines, as amended by OECD BEPS conclusions on Actions 8-9-10;
14. INVITES the Group to further develop, where appropriate, guidance notes on the interpretation of the criteria of the Code, including the gateway criterion, and their application;
15. CONFIRMS the importance that the principles of the Code of Conduct are applied on as broad geographical basis as possible, WELCOMES in this respect the recent Joint Statement with Switzerland and ongoing dialogue with Liechtenstein and INVITES the Group to open dialogues with relevant third countries, as well as to monitor the implementation of past agreements;
16. EXPRESSES the wish to improve the visibility of the work of the Code of Conduct Group and AGREES therefore that its results, in particular its 6-monthly reports, are systematically made available to the public;
17. INSISTS however on the confidentiality of the Group's deliberations with a view to protect the public interest as regards the economic policy of Member States, maintain the efficiency of the assessment process and counter related risks of aggressive tax planning;
18. INVITES the High Level Working Party on Taxation (HLWP) to conclude on the need to enhance the overall governance, transparency and working methods and to finalise the reform of the Group during the Dutch Presidency.

The President of the European Council, Donald Tusk received the letters of credentials of the following Ambassadors:

H. E. Mr Haymandoyal DILLUM, Ambassador, Head of the Mission of the Republic of Mauritius to the European Union
H.E. Mrs Oda Helen SLETNES, Ambassador, Head of the Mission of the Kingdom of Norway to the European Union
H.E. Mr Jawad Khadim Jawad AL-CHLAIHAWI, Ambassador, Head of the Mission of the Republic of Iraq to the European Union

On 8 December 2015, the Council approved the conclusion of agreements with Liechtenstein and Switzerland aimed at improving tax compliance by private savers. 

The two agreements will contribute to efforts to clamp down on tax evasion, by requiring the EU member states and the two countries to exchange information automatically. 

This will allow their tax administrations improved cross-border access to information on the financial accounts of each other's residents. 

The agreements upgrade 2004 agreements that ensured that Liechtenstein and Switzerland applied measures equivalent to those in an EU directive on the taxation of savings income. The aim is to extend the automatic exchange of information on financial accounts in order to prevent taxpayers from hiding capital representing income or assets for which tax has not been paid. 

The Council also approved the signing of a similar taxation agreement with San Marino, ahead of a signature ceremony later in the day.

The EU-Switzerland agreement was signed on 27 May 2015, and the EU-Liechtenstein agreement on 28 October 2015.

On 8 December 2015, the Council adopted a directive aimed at improving transparency on tax rulings given by member states to companies in specific cases about how taxation will be dealt with. 

The directive is one of a number of initiatives aimed at preventing corporate tax avoidance. 

It will require member states to exchange information automatically on advance cross-border tax rulings, as well as advance pricing arrangements. Member states receiving the information will be able to request further information where appropriate. 

The Commission will be able to develop a secure central directory, where the information exchanged would be stored. The directory will be accessible to all member states and, to the extent that it is required for monitoring the correct implementation of the directive, to the Commission.

A tax ruling is an assurance that a tax authority gives to a taxpayer on how certain aspects of taxation will be dealt with in that specific case. An advance pricing arrangement is a type of tax ruling, issued by a tax authority to determine the method and other relevant details of pricing to be applied to a transfer of goods or services between companies. 

Tax planning

Tax planning by companies has become more elaborate in recent years, developing across jurisdictions. It involves, for example, the shifting of taxable profits towards states with more advantageous tax regimes, or eroding the tax base. 

The directive will ensure that where one member state issues an advance tax ruling or transfer pricing arrangement, any other member state affected is in a position to monitor the situation and the possible impact on its tax revenue. 

International fora 

The directive is in line with developments within the OECD and its work on tax base erosion and profit shifting. G20 leaders approved the outcome of that work at a summit in Antalya on 15 and 16 November 2015. 

Application 

The Council reached political agreement on the directive on 6 October 2015. The European Parliament gave its opinion on 27 October 2015. 

The new rules will be applied from 1 January 2017. In the meantime, existing obligations for member states to exchange information will stay in place. 

Concerning rulings issued before 1 January 2017, the following rules will apply: 

• If advance cross-border rulings and advance pricing arrangements are issued, amended or renewed between 1 January 2012 and 31 December 2013, such communication shall take place under the condition that they are still valid on 1 January 2014.
• If advance cross-border rulings and advance pricing arrangements are issued, amended or renewed between 1 January 2014 and 31 December 2016, such communication shall take place irrespectively of whether they are still valid or not.
• Member states will have the possibility (not an obligation) to exclude from information exchange advance tax rulings and pricing arrangements issued to companies with an annual net turnover of less than €40 million at a group level, if such advance cross-border rulings and advance pricing arrangements were issued, amended or renewed before 1 April 2016.  However, this exemption will not apply to companies conducting mainly financial or investment activities.

Package of measures

The Commission proposed the directive as part of a package of measures in March 2015. The text amends directive 2011/16/EU on administrative cooperation in the field of taxation, which sets out practical arrangements for exchanging information.

On 7 December 2015, the Luxembourg presidency of the Council reached an informal agreement with the European Parliament on common rules to strengthen network and information security  (NIS) across the EU.

The new directive will set out cybersecurity obligations for operators of essential services and digital service providers. These operators will be required to take measures to manage cyber risks and report major security incidents, but the two categories will be subject to different regimes.

Xavier Bettel, Luxembourg's Prime Minister and Minister for Communications and the Media, and President of the Council, said: "This is an important step towards a more coordinated approach in cybersecurity across Europe. All actors, public and private, will have to step up their efforts, in particular by increased cooperation between member states and enhanced security requirements for infrastructure operators and digital services".

Stronger rules for essential operators

The directive lists a number of critical sectors in which operators of essential services are active, such as energy, transport, finance and health. Within these sectors, member states will identify the operators providing essential services, based on clear criteria laid down in the directive. The requirements and supervision will be stronger for these operators than for providers of digital services. This reflects the degree of risk that any disruption to their services may pose to society and the economy.

A more uniform regime for digital service providers

The following digital services will be covered by the directive: e-commerce platforms, search engines and cloud services.

Digital service providers are typically active in many member states. To ensure that they are treated in a similar way across the EU, the rules will apply to all operators providing such services, with the exclusion of small companies.

National and EU-level frameworks to counter cyber threats

Each EU country will be required to designate one or more national authorities and set out a strategy to deal with cyber matters.

Member states will also step up their cooperation on cybersecurity. An EU-level cooperation group will be created to support strategic cooperation and exchange of best practices among member states. A network of national computer security incident response teams (CSIRTs) will be set up to promote operational cooperation. Both are also expected to help develop confidence and trust between member states.

Deadlines

Member states will have 21 months from the directive's entry into force to adopt the necessary national provisions. Following this period, they will have 6 further months to identify their operators of essential services.

How will it become law?

For the Council, the deal still has to be confirmed by member states. The presidency will present the agreed text for approval by member states' ambassadors at the Permanent Representatives Committee (Coreper) on 18 December. To conclude the procedure, formal adoption by both the Council and the Parliament is required.

Good evening everyone and welcome to this press conference. I was going to say that we've had busier turnouts - looking at the audience tonight - but it makes sense, because we also had a short Eurogroup meeting. 

Let me first make a couple of remarks on Greece, which was one of the countries discussed today. After successful implementation of the first set of milestones last month, today we took stock of the implementation of the second set of milestones. Which as you know are connected to the last sub-tranche of €1 bn. The design of the second set has been agreed by the EWG at the end of November. We called on the Greek authorities to implement these milestones as soon as possible and as agreed. The objective is to settle this by mid-December, so that we can focus on some of the major fiscal and structural reforms that are still open and need to be finalised for the first review early next year.  

Recapitalisation of the four significant banks is almost finalised. We expect the last disbursement to be made tomorrow after approval of the ESM Board of Directors. Overall, a good success with significant involvement from private investors. The exercise will cost the programme less than €5½ bn, well below, as you know, initial estimates.  

Secondly, we welcomed Danièle Nouy, the SSM chair. She joined us for one of our regular exchanges of views as part of what's called the accountability arrangements for the SSM. She informed us on the execution of the supervisory work by the SSM, in particular the recent Comprehensive Assessments and the Supervisory Review and Evaluation Process (SREP), as well as on the SSM's key policy challenges and priorities going forward.  

We had a thematic discussion on pensions and pension reforms, which are central to fiscal sustainability in the euro area. Top of the agenda in many member states that have already enacted considerable pension reforms. But pension expenditure is still one of the main challenges for long-term sustainability. Alongside addressing pension expenditures, we need a range of policies to ensure that retirement incomes remain sufficient in the future. There is also a strong link, which was mentioned by a number of colleagues, to reforms on the issue of long-term care, the costs of care, which are also linked to the aging of our populations. And also reforms of the labour market, making sure that also all employees can still participate in the labour market. We will come back to those issues, the issues of pension reforms, over the course of the next year. We've asked both the Commission to come forward with some sustainability scenarios, also scenarios with more downside risks, to check whether stresses in our systems, and we've asked EWG to do more work on also the possibility of benchmarking pension reforms. So we will come back to those issues in a second round next year.  

As I've said, we also discussed some country issues. A post-programme surveillance of Ireland took place in November 2015. The institutions informed us about the main findings of the review. I don't need to tell you all this. Very strong economic growth. Continued improvement on the fiscal and financial side. Overall an impressive performance by Ireland.  

Two years after the end of the programme, I think Ireland once again demonstrates that determined implementation of an adjustment programme can turn an economy around, to the benefit of citizens.  

We also discussed Portugal, in a different way. We welcomed the new Portuguese finance minister, Mário Centeno, to the Eurogroup, and his state secretary Ricardo Mourinho Félix. The minister outlined the new government's economic policy priorities and has assured us that he will come with a draft budgetary plan as soon as possible, probably at the beginning of the January 2016, for us to be able to discuss that with the Commission's opinion in our February meeting. This is how I see it in the planning.  

Finally one remark: we've come to an agreement on the constituency for the AIIB, the Asian Infrastructure Investment Bank. We discussed it last month, had a silent procedure; after that only Finland said that they can not enter in the constituency at this point, but the other countries will make a start with a eurozone constituency and we will now concentrate on setting up what is called a constituency agreement. Work will be done on that by the EWG. So that is very good news as we have an agreement for that.

Place
Justus Lipsius building, Brussels 

Chair
Pierre Gramegna, Minister for Finance of Luxembourg 

All times are approximate and subject to change 

+/- 08.00
ESM Board of Directors 

+/- 08.45
Doorstep by Minister Gramegna

+/- 09.00
Ministerial breakfast
Roundtable 

+/- 10.15
Informal session on SRM (bridge financing) 

+/- 10.45
Beginning of ECOFIN Council meeting
Adoption of the agenda
Approval of legislative A items (in public session)

+/- 10.25
Financial transaction tax
Common consolidated corporate tax base
Banking union - European deposit insurance scheme
Any Other Business
Approval of non-legislative A items
Implementation of banking union
Terrorist financing
Business taxation - Code of conduct
Business taxation - Base erosion and profit shifting
Economic governance - 2016 European Semester
Flexibility under the Stability and Growth Pact
EU statistics
EU budget discharge - Court of Auditors report 

14 .00 (At the end of the meeting)
Press conference

The Council appointed Angel Losada Fernandez as the EU Special Representative (EUSR) for the Sahel until 28 February 2017.

Mr Losada replaces Mr Michel Dominique Reveyrand - De Menthon, who was appointed on 18 March 2013.

EUSRs promote the EU's policies and interests in troubled regions and countries and support the work the High Representative of the Union for Foreign Affairs and Security Policy, Federica Mogherini. Mr Losada will lead the EU's contribution to regional and international efforts for lasting peace, security and development in the Sahel. He will also coordinate the EU's comprehensive approach to the regional crisis, on the basis of the EU Strategy for Security and Development in the Sahel.

Mr Losada is a senior Spanish diplomat with more than 30 years' experience. He recently served as ambassador of Spain to Nigeria and Kuwait.