In focus: TAXE II Committee puts companies' tax policies under scrutiny
As has been reported in the December 2015 and January 2016 Brussels Agenda editions, the TAXE II Committee started its work in January 2016 with the aim of fighting tax evasion and aggressive tax planning at EU and international level.
The committee is building on the work of its predecessor (The Special Committee on Tax) and has started with hearing from banks and multinationals to elicit their views on proposed tax legislation. A significant change from the previous Tax committee is that banks and multinationals have been sending their representatives to the meetings. Corporate giants like Google, IKEA, Apple and MacDonalds - all of whose tax treatments have been investigated by the commission in the Lux leaks cases - have made an appearance. The committee in its recent meeting of 4 April 2016 heard from RBS and the Deutsche Bank about the “Panama Papers” that are of course causing a lot of excitement in the committee.
The TAXE II Committee is closely following the work of the Commissioners who are also working on tax policy issues. The committee heard from the Competition Commissioner, Margrethe Vestager on 4 April 2016 about the state aid probes. Ms Vestager explained that the commission had tried to open cases where it believed that there were reasons to be concerned that rulings existed which could be used in a way that favoured certain companies, or types of companies. She also explained that around 200 of the rulings the EU had looked at were transfer pricing rulings. She stated however that provided that they matched economic reality they were not problematic. The commissioner was therefore able to assure the Committee that her team is continuing to make good progress in the tax ruling cases.
In parallel, the committee on Economic and Monetary Affairs (ECON) is continuing to work on the legislative files, such as the tax transparency directives and the anti-tax avoidance package. It appears that much of the discussion in the TAXE II Committee is feeding into these files, as described by Anneliese Dodds MEP (S&D, UK) in her viewpoint article.
The issues that the TAXE II Commitee is focusing on are: proposals on tax havens and the role of the tax advisors - including legal advisors, publication and transparency of the tax data, examining Member States’ compliance with tax legislation and state aid rules and clarifying the concept of permanent establishment. Following the Panama Papers revelations the MEPs work will continue also beyond TAXE II. The Conference of Presidents has already decided on setting up a new committee of Inquiry to follow. A formal decision on the new committee will be taken in May 2016.