European Union

The Benjamin Franklin quote above is increasingly becoming true, even to the old ‘certainty’ in the EU that common tax policies – demanding unanimous decision-making between Member States – will only move at glacier speed through the negotiations.

Corporate taxation currently features big on the European policy agenda, and is unlikely to lose ground any time soon. A combination of heightened media attention, revelations of tax evasion through Luxleaks or Panama Papers, budgetary constraints in many countries and increased awareness by the public have created unprecedented momentum for a more coordinated EU corporate tax policy.

The undeniable truth (?) of the Hart quote notwithstanding, this opportunity to be civilised in itself comes at a prize. The changes to tax rules that already have been and will be discussed have the potential to substantively impact how businesses pay and report taxes, how the companies are structured and not only how they do tax planning, but how they do business as such, in Europe.

Rules on interest deduction limitations, hybrid mismatches and controlled foreign companies, whilst seemingly ‘just’ an implementation of OECD guidelines might have further reaching consequences than any parties imagined when these issues where negotiated – in the context of voluntary guidelines – at the august Paris based institution.

In parallel, companies’ own corporate taxation policies are increasingly scrutinized by the public, with possible impact on reputation and side-effects on the ability to influence public policy not limited to taxation – and with layers to be further applied, if the Commission’s proposal on public country-by-country reporting gets tailwind through legislative negotiations.

Nevertheless… the time for thinking of EU tax policy is now! Work on greater harmonization of corporate taxation rules in the EU and to close loopholes stemming from different national tax laws is on full throttle as no EU government – or anyone else for that matter – wants to be seen as blocking the crack down on tax evasion. And rightly so!

Automatic exchange of tax rulings between EU Member States’ tax authorities and sharing detailed information on companies’ revenues, profits and taxes paid have already been agreed on – in both cases within only a few months after publication of the Commission’s legislative proposal.

Currently, EU countries – pushed forward by the ambitious Dutch Council Presidency – are working hard on the abovementioned issues of the anti-tax avoidance to tackle base erosion and profit shifting – where substantive changes to interest deductibility or hybrid mismatches are expected to be agreed on soon. A new proposal to increase tax transparency of multinational companies has also just been brought forward and later this year more work on a harmonized EU corporate tax base is expected.

But whilst the pace in acting affirmatively towards tax avoidance is laudable, the speed of the legislative process – leaving only a narrow window for the business community and experts to provide input – entails the risk that whilst the starting point and pace was benevolent and laudable, the end result might lead to unwarranted damages – as is always the risk, when regulation is hastened forward.

Martin Bresson

AMENDMENTS 7 - 84 - Draft opinion on the reinforcement of checks against relevant databases at external borders
Committee on Foreign Affairs

Source : © European Union, 2016 - EP

Source : © European Union, 2016 - EP

Source : © European Union, 2016 - EP

Poland v Parliament and Council
Principles of Community law
The new EU directive on tobacco products is valid

Poland v Parliament and Council
Principles of Community law
The new EU directive on tobacco products is valid

Poland v Parliament and Council
Principles of Community law
The new EU directive on tobacco products is valid

AMENDMENTS 1 - 27 - Draft opinion on the preparation of the post-electoral revision of the MFF 2014-2020: Parliament's input ahead of the Commission's proposal
Committee on Foreign Affairs

Source : © European Union, 2016 - EP

On 21 April, SEDE held a public hearing to address the cyber defence and resilience from the CSDP perspective at the EU level and national levels. How to build the resilience and efficiently protect critical infrastructures? Which are the cyber warfare capabilities in our changing world? Given that cyber security stays high on the European agendas and is one of the Presidency priorities, it will be extremely interesting to gather different experts and hear which their insights are.
Location : Paul-Henri Spaak 5B001
Programme
Programme
Presentation
Presentation by Steve Purser, Head of Core Operations Department, ENISA
Source : © European Union, 2016 - EP

Speech by Jacek Bylica, Principal Adviser and Special Envoy for Non-proliferation and Disarmament, EEAS : [EN]
Source : © European Union, 2016 - EP

Welcome to Tuesday’s edition of our daily Brussels Briefing. To receive it every morning in your email in-box, sign up here.

EU economic chief Pierre Moscovici, right, with Portugal's new finance minister in Lisbon

There’s been a rare spate of good economic news for the eurozone recently, with Eurostat announcing last week that the currency union’s gross domestic product had finally returned to pre-crisis levels and was growing at a 0.6 per cent quarterly clip – enough to outpace the US or the UK so far this year. But growth remains uneven across the 19-member bloc, and the first quarter’s performance remains meagre by historical standards. As a result, it will likely not be enough to help eurozone countries currently finding it difficult to get their debt and deficit levels back under EU budget ceilings.

Those countries sparring with Brussels over such budget targets – France, Italy, Spain and Portugal – will be in the spotlight today when the European Commission issues its new economic forecasts, which will include predictions on whether any of them are making progress towards getting their deficits below the 3 per cent of GDP threshold or – in the case of Italy, which is already below the deficit ceiling – are cutting their debt piles fast enough.

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DRAFT REPORT on EU strategic communication to counteract propaganda against it by third parties
Committee on Foreign Affairs
Anna Elżbieta Fotyga

Source : © European Union, 2016 - EP

General : The award ceremony will take place at the Vatican on 6 May at 12:00. It will be introduced by “laudatio” speeches by European Parliament President Martin Schulz, Commission President Jean-Claude Juncker and Council President Donald Tusk. On the previous day, the three EU Presidents will take part in a panel debate about the state of the EU, preceded by an address by Italian PM Matteo Renzi.

Source : © European Union, 2016 - EP