In its annual report on taxation, the Commission sets out the Union`s achievements and the issues that still need to be addressed in this area. The fight against tax avoidance, tax evasion and tax evasion remains a priority for the Union institutions, both at Union and global level. Work also continued to make corporate taxation in the EU fairer and better aligned with a modern digital economy in the Single Market. Some of the most important initiatives include: The final report was adopted by the plenary of Parliament on 26 March 2019. It underlines the urgent need and continues to reform the rules so that international, national and EU tax systems are adapted to the new economic, social and technological challenges of the twenty-first century. It concluded that current tax systems and accounting methods are not prepared to keep pace with these developments and ensure that all market participants pay their fair share of taxes. MEPs welcomed the fact that during its last mandate the Commission presented twenty-six legislative proposals aimed at closing loopholes, improving the fight against financial crime and aggressive tax planning and increasing the efficiency of tax collection and justice. However, they deeply regretted the lack of progress in the Council on important initiatives to reform corporate taxation, which have not yet been completed due to the lack of real political will. They called for the swift adoption of ongoing EU initiatives and close monitoring of their implementation to ensure efficiency and proper implementation and to keep pace with the multiplicity of tax fraud, tax evasion and aggressive tax planning. Finally, MEPs reaffirmed the need for the EU to adopt a comprehensive strategy to help Member States, through relevant policies, move from their current harmful tax systems to one that is compatible with the Union`s legal framework and the spirit of its Treaties.
The objective of TAX3, the Special Commission on Financial Crime and Tax Evasion and Evasion, was to continue the work of the TAXE, TAXE 2 and PANA Committees and to examine issues related to taxation of the digital sector, national access to nationality programmes and VAT fraud. the chapter on taxation (Articles 110 to 113) of the Treaty on the Functioning of the European Union (TFEU) on the harmonisation of laws relating to turnover taxes, excise duties and other indirect taxes; the chapter on approximation of laws (Articles 114 to 118 TFEU), which covers taxes having an indirect impact on the creation of the internal market, as tax rules are not subject to the ordinary legislative procedure; other tax policy provisions relating to the free movement of persons, services and capital (Articles 45 to 66 TFEU), the environment (Articles 191 to 192 TFEU) and competition (Articles 107 to 109 TFEU). The first of these, the Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE), drew attention to a striking paradox: free competition in tax matters and the lack of cooperation between Member States have led to a decoupling between the place of value creation and the place of taxation of profits. This is leading to an erosion of the corporate tax base and revenue losses in several countries, some of which have also been subject to austerity measures. The Union`s tax strategy is set out in the Commission Communication “Tax Policy in the European Union — Priorities for the coming years” and in the forthcoming publication “Taxation – Promoting the Internal Market and Economic Growth: Towards simple, fair and efficient taxation in the European Union”. towards simple, fair and efficient taxation in the European Union). The power to introduce, abolish or adjust taxes remains in the hands of the Member States. Provided that it complies with Union rules, each Member State is free to choose the tax system it considers most appropriate. In this context, the main priorities of the Union`s tax policy are the removal of tax obstacles to cross-border economic activities, the fight against harmful tax competition and tax evasion, and the promotion of closer cooperation between tax administrations in order to control and combat fraud. Enhanced coordination of tax policies would ensure that Member States` tax policies support the Union`s broader policy objectives as set out in the Single Market Act. In addition, taxation is one of the main policy areas monitored under the European Semester, the annual cycle of economic policy coordination. a series of country-specific recommendations addressed to Member States regularly address the fight against aggressive tax planning, tax evasion or tax avoidance.
In view of the revelations of the Panama Papers and LuxLeaks, which highlighted the need for greater cooperation and transparency at global level, the TAXE 2 Committee benefited from the work of the AXE Committee. Its final report was adopted by Parliament in a resolution of 6 July 2016 in which sanctions against non-cooperative tax jurisdictions on the blacklist of tax havens also apply to companies, banks and law firms, as well as tax advisors, with the possibility of withdrawing their professional licence. It highlighted the negative consequences of patent-friendly tax regimes, which in most cases had been used by multinational corporations for tax evasion. The Committee on Money Laundering, Tax Avoidance and Tax Evasion (PANA) built on the work of TAXE et TAXE 2 as well as Parliament`s resolution of December 2015 on enhancing transparency, coordination and convergence of corporate tax policies, which highlighted regulatory and supervisory challenges in dealing with tax issues. Enhanced cooperation (Articles 326 to 334 TFEU) may be applied in tax matters. The main feature of EU tax rules on the adoption of legislative acts is that the Council, acting unanimously on a proposal from the Commission, is consulted by Parliament. Provisions adopted in the field of taxation include directives on the approximation of national provisions and Council decisions. Firmly convinced that maintaining unanimity in all tax decisions does not contribute to achieving the level of tax coordination necessary for Europe, the Commission has put forward proposals for the transition to qualified majority voting in certain tax areas. However, these proposals were rejected by the Member States. In general, the European Parliament has supported the broad lines of the Commission`s programmes in the field of taxation, with the fight against tax fraud, tax evasion and money laundering being a political priority in the current and previous legislatures. Parliament`s recommendations in this area have benefited from the work of several ad hoc committees. Direct taxes include taxes on income, wealth and wealth, whether natural or legal persons.
Personal income tax as such is not included in EU rules (on the contrary, EU action in this area is based on the case law of the Court of Justice). EU action in the field of company taxation is more developed, but focuses only on measures related to internal market principles. Indirect taxes are those that are not levied on income or wealth. These include value added tax (VAT), excise duties, import duties, energy taxes and other environmental taxes. As the development of EU tax legislation focuses on the proper functioning of the internal market, the harmonisation of indirect taxation has been addressed earlier and more thoroughly than the harmonisation of direct taxation.
