On the 5th of March, the Tax Commissioner Paolo Gentiloni held a speech setting up the Commission’s priorities for EU Tax policy. Below you will find an overview of the 4 main areas covered by the Commissioner today and related mentioned actions:
European Green Deal
Revision of the Energy Tax Directive (ETD), removing the implicit subsidies for fossil fuels, along with the tax exemptions for aviation and maritime industries. Yesterday, the European Commission has launched a Roadmap on the revision of the ETD that will be followed by a public consultation in the second quarter of this year. The Commission will publish a proposal for Directive in the first half of 2021.
Carbon Border Adjustment Mechanism to address the risk of carbon leakage, putting a carbon price on imports, to deter polluting processes from shifting elsewhere. Yesterday, the European Commission has launched a Roadmap on a new Emission trading scheme that will be followed by a public consultation in the first quarter of this year. The Commission will publish a proposal for revising the ETD in the first half of 2021.
The Commissioner is ready to use the provisions in the EU treaties that allow legislation to be adopted in the field of taxation by qualified majority rather than by unanimity.
Digitalisation
The Commission is in favour of a global approach at OECD/G20 level to tackle company taxation in order to avoid uncertainty and risks of double taxation. The rules should reflect not the physical presence of a company but where value is really created (interactions with users and their data) and allocate the taxable profits accordingly.
If global consensus cannot be reached, the Commission will be ready to propose an EU vision for business taxation rapidly, including a relaunch of the proposals to create a Common Consolidated Corporate Tax Base (CCCTB).
Fair Taxation
EU transparency rules must cover the rapidly growing platform economy. The Commission will be making a proposal to that effect this summer. The proposal is linked to the Public Consultation on strengthening the exchange of information framework in the field of taxation (Directive 2011/16/EU on DAC).
Tax Competition
The Commissioner is firmly in favour of the idea of minimum effective taxation.
The Commission is planning to update the Code of Conduct on Business Taxation.
The Commission will present proposals to reduce double taxation, to prevent and resolve administrative disputes, and to enhance cooperation between authorities and taxpayers across Europe.
The Commission will also propose simplifications to EU VAT compliance rules in 2021.
Finally, the Commissioner stated that in June the Commission will finalise an Action Plan setting out a roadmap of initiatives to fight tax evasion and ensuring compliance.
(Copyright foto: Paolo Gentiloni – Facebook)
