European Union

Source : © European Union, 2016 - EP

The European Commission's proposal for an EU anti-tax avoidance directive was welcomed by Parliament's Economic and Monetary Affairs Committee in a resolution voted on Tuesday. MEPs nonetheless advocated stricter limits on deductions for interest payments and an effective corporate tax rate of 15%.
Committee on Economic and Monetary Affairs

Source : © European Union, 2016 - EP

The European Commission's proposal for an EU anti-tax avoidance directive was welcomed by Parliament's Economic and Monetary Affairs Committee in a resolution voted on Tuesday. MEPs nonetheless advocated stricter limits on deductions for interest payments and an effective corporate tax rate of 15%.
Committee on Economic and Monetary Affairs

Source : © European Union, 2016 - EP

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Disclaimer : The interpretation of debates serves to facilitate communication and does not constitute an authentic record of proceedings. Only the original speech or the revised written translation is authentic.
Source : © European Union, 2016 - EP

1.           WELCOMES the publication of the Commission's country reports analysing the economic policies for each of the Member States, including the in-depth reviews (IDRs) in the context of the Macroeconomic Imbalances Procedure (MIP), as well as the accompanying Communication summarising the main results of the IDRs. 

I - IN-DEPTH REVIEWS 

2.           CONSIDERS that the IDRs are well structured as a key part within the country reports and NOTES the importance of presenting a thorough analysis of the imbalances in each of the Member States under review as the basis for multilateral surveillance, enhanced domestic ownership of reforms and effective policy adjustment. RECOGNISES that the analysis covers possible spillover effects to other countries and the euro area where relevant, differentiates between the adjustments driven by cyclical factors and those resulting from structural changes, and takes country-specific circumstances into account. Relevant analytical tools are also applied in view of the specific challenges of each economy and complemented by qualitative analysis where needed. 

3.           WELCOMES the Commission's effort to improve the transparency of the MIP, including streamlining and stabilisation of the categories of macroeconomic imbalances, the publication of a compendium bringing together relevant information on the implementation of the MIP, and the inclusion of new summary tables in the IDRs (MIP assessment matrices). NOTES Commission's plans with regard to specific monitoring of recommendations by the Council to all Member States concerned by imbalances and excessive imbalances, to ensure enhanced surveillance of the policy response to the imbalances identified. INVITES the Commission to outline a proposal for the concrete timing and content of this monitoring, including plans to differentiate with respect to the severity of imbalances, as well as the articulation with other surveillance procedures, notably post programme surveillance for countries concerned to avoid duplication and in line with established practice. EMPHASISES the importance of efficiency, transparency and predictability in assessing macroeconomic imbalances in the MIP. In light of this, UNDERLINES the importance of presenting both the country analysis and the conclusions on the assessment of imbalances together in line with the European Semester Roadmap.  

4.           AGREES that 13 of the examined Member States (Bulgaria, Germany, Ireland, Spain, France, Croatia, Italy, Cyprus, the Netherlands, Portugal, Slovenia, Finland and Sweden) are experiencing macroeconomic imbalances of various nature and magnitude. 

5.           AGREES with the view of the Commission that excessive imbalances exist in 6 Member States (Bulgaria, France, Croatia, Italy, Cyprus, and Portugal). The Council will carefully assess the Commission's further review for Croatia and Portugal presented in late May, which should take into account the policy measures outlined in their National Reform Programmes to assess whether further steps are needed. UNDERLINES that the MIP procedure should be used to its full potential, with the corrective arm applied where appropriate.   

 6.           AGREES that 6 of the examined Member States (Belgium, Estonia, Hungary, Austria, Romania and the UK) do not experience macroeconomic imbalances in the sense of the MIP. 

7.           UNDERLINES the continued need for policy action and strong commitment to structural reforms in all Member States, in particular when they face macroeconomic imbalances affecting the smooth functioning of EMU. Imbalances should be addressed in a durable manner focusing on key challenges, reducing risks, facilitating the rebalancing of the EU economies and creating conditions for sustainable growth and jobs. 

8.           RECOGNISES the continued progress achieved by Member States in correcting their external and internal imbalances, thus contributing to the rebalancing in the EU and within the euro area. However, UNDERLINES that there are still sizeable risks in certain Member States. While current account deficitis of the pre-crisis period have been considerably reduced or have moved to surplus, large stocks of external liabilities remain a vulnerability in some net debtor countries. ACKNOWLEDGES that cost competitiveness has generally improved in countries that exhibited large external deficits, with more limited evidence pointing to improvements in non-cost competitiveness. At the same time, elevated current account surpluses in some Member States with relatively low deleveraging needs persist and could under some circumstances indicate large savings and investment imbalances deserving progress on policy actions. 

9.           UNDERLINES that high levels of private and government debt remain an important challenge in a number of Member States in the context of low inflation and growth rates. Despite notable progress, further structural reforms are needed to enhance the growth potential and to tackle high unemployment, in particular among the youth and long-term unemployed. 

II - IMPLEMENTATION OF COUNTRY SPECIFIC RECOMMENDATIONS (CSRs)

10.         WELCOMES progress made in addressing the 2015 CSRs. The streamlined set of 2015 CSRs allowed for greater focus on tackling pressing challenges and persistent macroeconomic imbalances. TAKES NOTE that reform implementation has been uneven across policy areas and countries and that in only a few cases has substantial progress been made in addressing the CSRs. STRESSES that reform implementation needs to be stepped up to address the policy challenges outlined below and RECALLS the importance of a timely assessment of the implementation of CSRs in the Council prior to the proposal of new CSRs, in order to draw conclusions, increase national awareness and implement reforms effectively in each country. 

11.         STRESSES that further structural reforms to services, product and labour markets, alongside responsible, sound fiscal policies are needed to strengthen and sustain the economic recovery, correct harmful imbalances, achieve fiscal sustainability, improve the conditions for investment, and reinforce the single market, unleashing the growth potential of Member States' economies.     

12.         RECOGNISES the progress made by Member States in implementing CSRs in the areas of improving the business environment and in fighting against tax avoidance and improving its administration. Member states concerned should continue their efforts.  STRESSES that more progress could be achieved in generating a business and employment friendly regulatory environment, increasing female labour force participation, cutting red tape, strengthening both administrative efficiency and regulatory quality, and reducing the number of restrictions in the service sector, particularly by making it significantly easier for service providers to operate across borders. Progress in addressing existing gaps and weaknesses in some national fiscal frameworks has been made but are still limited in some Member States, and efforts should focus on ensuring their effective functioning to support the conduct of responsible fiscal policies. National fiscal frameworks should be brought in line with EU requirements. 

13.         AGREES that there is an urgent need to improve investment conditions in order to attract increased private investment in the real economy and ensure high quality public investment and infrastructures. Reform progress has been slow in tackling problems regarding sector specific regulation and other impediments to investment and in reforming public administration, judicial systems, insolvency frameworks and the business environment, including access to finance. Despite some progress, barriers to investment persist in some key sectors in many Member States. This is particularly the case for services, network industries and construction. 

14.         WELCOMES progress in reforming labour markets, but notes that significant challenges and implementation gaps remain. There remains potential to broaden tax bases and reduce the tax burden on labour. The successful integration of migrants and refugees in some Member States requires particular attention. While progress has been made in bringing back to the labour market the unemployed, further structural reforms to support employment and active labour market policies are needed. 

Ahead of the University of Edinburgh’s free online course Towards Brexit? The UK’s EU Referendum and one month before the referendum, here are five things you need to know about the Brexit debate:

European Flag, European Parliament, CC-BY-NC-ND-2.0

1. We’ve been here before

In 1975, the UK held its first-ever nationwide referendum on whether to stay in the European Economic Community (the precursor to the EU). The result was a two-thirds majority in favour of remaining in the Common Market. That said, it’s very unusual for a country to hold a vote directly on the question of EU membership. Most past referendums on the EU in member states have been about ratifying new treaties.

2. The UK’s not so different

Over the years, the difficult relationship between the UK and the EU has become legendary. For instance, it has opt-outs from a number of European policies, like the euro or borderless travel (Schengen). This reputation can sometimes give the impression that the UK is particularly alone or different. However, that’s not really the case. In reality, every member has its own issues with the EU – some are just more obvious than others.

3. Global interest is high

Although the referendum will be decided by UK voters, many countries, along with companies and organisations around the world, have a substantial interest in the outcome. For this reason, a number have broken with the convention of not engaging in a country’s internal debates and have expressed their views on the UK’s EU membership. However, it’s not clear what impact these interventions actually have on public opinion.

4. The facts? It’s not as easy as that

The EU can be quite complicated and the referendum debate has featured topics such as the economy, migration, security and democracy. Many people will be looking for information before the vote. However, most of the questions around these issues come down to personal opinion, rather than factual answers. While facts and evidence do naturally exist, they can only inform. In the end, voters will have to make up their own minds on whether EU membership is worthwhile or not.

5. The referendum won’t end the debate

This June’s vote is just the latest landmark in the UK’s history with the European Union. Whatever the outcome on 23 June, the referendum won’t settle the issue. If the result is to leave, the negotiations that follow will focus on what kind of relationship the UK will have with the EU going forward. If the result is to remain, the debate on EU membership will continue and calls for a second referendum will likely materialise. Either way, the saga will carry on.

Find out more – join the free online course: 
Towards Brexit? The UK’s EU Referendum

This article was originally published on the FutureLearn blog.

Please read the comments policy before commenting.

Shortened link: britainseurope.uk/22

How to cite this article:

Salamone, A (2016) ‘Five Things You Need to Know About Brexit’, Britain’s Europe (Ideas on Europe), 24 May 2016, britainseurope.uk/22

The post Five Things You Need to Know About Brexit appeared first on Ideas on Europe.

Plenary sessions : Data on your online activities - from social media to shopping - is regularly sold to American advertisers. Strong data protection standards are in place in the EU to protect your privacy, but this is not the case in the US. The EU is now negotiating a new agreement with the US called Privacy Shield to safeguard your data. MEPs debate whether this deal will offer enough protection in plenary on Wednesday 25 May. Read on for an explanation of the issues involved.

Source : © European Union, 2016 - EP

Plenary sessions : Data on your online activities - from social media to shopping - is regularly sold to American advertisers. Strong data protection standards are in place in the EU to protect your privacy, but this is not the case in the US. The EU is now negotiating a new agreement with the US called Privacy Shield to safeguard your data. MEPs debate whether this deal will offer enough protection in plenary on Wednesday 25 May. Read on for an explanation of the issues involved.

Source : © European Union, 2016 - EP

Participants in two adult education groups are showing that every day in life can be a school day if you have the right support to encourage lifelong learning.

Source : © European Union, 2016 - EP

Place:        Justus Lipsius building, Brussels
Chair:        Jeroen Dijsselbloem, Minister for Finance of the Netherlands

All times are approximate and subject to change

+/- ttbc
 Doorstep by Minister Dijsselbloem 

+/- 08.00
Annual EIB governors' meeting
Roundtable

+/- 09.00
Ministerial breakfast

+/- 11.30
Beginning of Council meeting
Adoption of the agenda
Adoption of legislative A items (public session)
Anti-Tax Avoidance Package  (public session)
AOB: Financial services (public session) 

Adoption of non-legislative A items
Implementation of the Banking Union
VAT Action Plan
European Semester 2016
Any other business 

At the end of the meeting
Press conference (live streaming)

+/- 15.00
Economic and Financial dialogue between the EU and the Western Balkans and Turkey

 

On 25 May 2016, the Council adopted rules on the reporting by multinational companies of tax-related information and exchange of that information between member states. 

The directive is the first element of a January 2016 package of Commission proposals to strengthen rules against corporate tax avoidance. The directive builds on 2015 OECD recommendations to address tax base erosion and profit shifting (BEPS). 

The directive will implement OECD anti-BEPS action 13, on country-by-country reporting by multinationals, into a legally binding EU instrument. It covers groups of companies with a total consolidated group revenue of at least €750 million.

The principal aim of the directive is to prevent multinationals from exploiting the technicalities of a tax system, or mismatches between different tax systems, in order to reduce or avoid their tax liabilities. 

Information to be reported by multinationals 

Increasing transparency, the directive requires multinationals to report information -- detailed country-by-country -- on revenues, profits, taxes paid, capital, earnings, tangible assets and the number of employees. 

This information must be reported, already for the 2016 fiscal year, to the tax authorities of the member state where the group's parent company is tax resident. 

If the parent company is not EU tax resident and does not file a report, it must do so through its EU subsidiaries. Such "secondary reporting" will be optional for the 2016 fiscal year, but mandatory as from the 2017 fiscal year. 

Information exchange 

The directive requires tax authorities to exchange these reports automatically, so that tax avoidance risks related to transfer pricing[1] can be assessed. For this, it builds on the EU's existing framework for automatic exchange between tax authorities, established by directive 2011/16/EU. An existing common communications network will be used, thereby saving implementation costs. 

The directive sets deadlines of: 

• 12 months after the end of the fiscal year for companies to file the information;
• a further three months for tax administrations to automatically exchange the information. 

It also requires the member states to lay down rules on penalties applicable to infringements. 

A common EU approach 

The directive will ensure harmonised implementation in the EU of the OECD recommendation on country-by-country reporting. 

The directive was adopted without discussion at a meeting of the Economic and Financial Council, following an agreement reached on 8 March 2016. 

Other initiatives 

The January 2016 anti-tax-avoidance package follows on from a number of EU initiatives in 2015. These include a directive, adopted in December 2015, on cross-border tax rulings. 

In December 2014, the European Council cited “an urgent need to advance efforts in the fight against tax avoidance and aggressive tax planning, both at the global and EU levels”. 

 

[1] Transfer pricing is the price paid for goods and services exchanged between entities that make up a corporate group.

 

The EU debate is a minefield, with half-truths and whole-lies coming from both camps. The reason for this, as I understand it, is twofold. Firstly, it is impossible to know what will happen in the event that the UK leaves the EU, or indeed what will happen in five, ten or fifty years’ time if we vote to stay on 23 June. Ergo, objective fact is largely off the table from the get-go. Secondly, the notion of ‘truth’ is tricky in ideological discussions. I recently saw Peter Hitchins make a brief intervention on the EU debate and was struck by his point that the signatories of the Irish Proclamation did not stand on the steps of the General Post Office with a detailed cost-benefit analysis of the impact on the economic forecasts and trade balance of the country. They held an ideological belief and made an impassioned political decision. By the same measure, the reason that ‘facts’ aren’t working as well in this referendum debate as some (myself included) might like, is because it is not a decision that can be based solely on fact. Moreover, in most cases, there genuinely are (at least) two answers to the question at hand. Untangling the accumulation of myths, misnomers and soundbites which permeate the referendum narrative is a job for someone more intelligent (not to mention more patient) than myself. However, in the spirit of ‘have blog, will air musings’, I draw attention here to one incident which has stuck in my mind (and which I noted down at the time) as emblematic of the problem with the EU referendum campaign.

On 3 March, BBC Radio 4’s Today programme conducted an interview with Conservative MP Bernard Jenkin, a member of the board of the Vote Leave campaign. Today presenter Mishal Husain put to Mr Jenkin that Sir Peter Ricketts, a recently-retired former ambassador, has raised concerns that if Britain were to leave the EU, France might cease to conduct border checks on those seeking entrance to the UK. Unusually for an MP on the Today programme, Mr Jenkin went on to directly address Sir Ricketts’ point with an equally valid counter-argument, but before he did, he made the following remarks:

‘Find me a diplomat that’s anti-EU…one of the reasons we’re in the mess we’re in is because we have diplomats who have religiously and slavishly pursued the European integration policy…they all have a certain view…it’s interesting, as soon as they retire they turn out to have this very pro-European view. I’m afraid I think it rather discredits the idea that we’ve got an impartial diplomatic service.’

In the interest of brevity, I will side-step the wealth of nonsense which Mr Jenkin managed to pack around his perfectly reasonable point that the French government is a rational and responsible body and is unlikely to severe all agreements with the UK overnight should we vote to leave. I will also by-pass the irony that I agreed with this central point, and yet he managed to present it and its contribution to his broader position in a way that was so infuriatingly exaggerated, misleading and childish that, in the end, it served only to convince me that I don’t want to be on any team that he is a part of. Instead, I draw attention to Mr Jenkin’s utterly bizarre string of logic which led him to conclude that, since British diplomats are commonly pro-EU, they must have been harbouring this dirty secret for many years and are somehow damaging British interests with their partiality.

I don’t have much difficulty accepting the premise of Mr Jenkin’s concern – it seems quite likely that many British diplomats (and, I imagine, diplomats from most other member states too) are pro-EU. What I find confusing is why he thinks that this is an innate characteristic, a preference which exists and pre-existed in British diplomats independent of their professional or personal experience, as if he suspects that they all went to a secret boarding school where they were drilled in the values of ‘ever closer union’ and prepared for infiltration into the UK’s diplomatic corps, only revealing their true, traitorous identities upon retirement. To my mind, the trend that Mr Jenkin identifies can best, if not only, be interpreted as follows: British diplomats (to accept Mr Jenkin’s premise that they all hold the same view as Sir Ricketts), having spent many years living in and working with the EU, have reached the conclusion that it is a project worthy of our support and participation. Possessing what is probably the most direct experience and expertise in the matter that it is possible to have, British diplomats consider the UK’s membership of the EU to be highly valuable and have chosen to voice this view in the context of the referendum campaign. Essentially, an expert group has presented its arguments for why the UK should vote ‘remain’.

This is an example of precisely the kind of rational contribution which should be being made in the referendum campaign. The view of Sir Ricketts and his colleagues, in light of their experience and expertise, carries value and voters should be exposed to it. This is not to say that it is wholly objective, of course it is not. British diplomats have particular experiences and, to that extent, their position is unavoidably biased. Furthermore, it would be impossible for me to say that I am certain that the argument they put forward is nothing but the unequivocal truth. These things are, incidentally, also true of any view aired by Mr Jenkin and his colleagues in the Vote Leave campaign, by those in the ‘remain’ camp, or by anyone else. However, by making his background known and ‘presenting his credentials’ to the British public, Sir Ricketts has made a valuable contribution which they can scrutinise and evaluate in the forming of their own judgements. Perhaps, rather than it being pro-EU campaigners who ‘lack confidence in this country’, as Mr Jenkin asserted later in his interview, it is those (on both sides of the issue) who exploit the inherently ideological nature of the referendum debate by framing informed opinion as inherent bias who lack confidence in British voters to decide for themselves.

—

Having finally submitted my thesis and in light of the impending referendum, I digress in this post from health governance – please excuse the misleading platform.

The post Fact, ideology and logic in the EU referendum campaign appeared first on Ideas on Europe.

On 25 May 2016, the Council adopted a directive maintaining for a further two years the minimum standard VAT rate at 15%. 

The minimum standard rate is aimed at preventing an excessive divergence in VAT rates applied by member states, and the structural imbalances or distortions of competition that could arise as a result. A minimum standard rate of 15% was applied until 31 December 2015. 

In view of on-going discussions on definitive rules for a single European VAT area, the directive extends the minimum standard rate for a period long enough to ensure legal certainty. It maintains the rate at 15% from 1 January 2016 until 31 December 2017. 

The directive was adopted without discussion at a meeting of the Economic and Financial Council.

http://tvnewsroom.consilium.europa.eu/uploads/council-images/thumbs/uploads/council-images/remote/http_7e18a1c646f5450b9d6d-a75424f262e53e74f9539145894f4378.r8.cf3.rackcdn.com/9d407128-83cd-11e5-b786-bc764e08d9b2_185.89_thumb_169_1463654453_1463654453_129_97shar_c1.jpg

EU Ministers of Foreign and European Affairs meet in Brussels on 24 May 2016 to prepare the June European Council and hold its annual rule of law dialogue.

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By Mehreen Khan

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Source : © European Union, 2016 - EP