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Commissioner candidates endorse tax justice measures during hearings

Added 09 Oct 2014
Tax was one of the key issues tackled when Commissioner candidates faced MEP questioning in the European Parliament over the past two weeks. Junker’s lineup of candidates were being grilled on their policies – and every other imaginable issue - as part of the Commissioner candidate hearings which take place every five years. 

Among the range of issues covered, several candidates endorsed a ‘goodie bag’ of tax justice proposals. These included country-by-country reporting, automatic exchange of information, public disclosure of beneficial ownership, unitary taxation and equal representation for developing countries in international negotiations on tax reforms.

This year’s hearings consisted of three hours of intense Q&A sessions as well as a written submission prepared by the candidate in advance. And they are not just theatre. Indeed this time the Slovenian candidate was rejected. 

The fact that so many Members of Parliament asked questions on taxation has shown the continued high priority that this topic has. Commissioners will no doubt take note that tax justice is an issue that has the attention of MEPs and the public. 

Below, we bring you a small excerpt of what the Commissioner candidates have said on tax justice issues: 

PIERRE MOSCOVICI: COMMISSIONER CANDIDATE FOR ECONOMIC AND FINANCIAL AFFAIRS, TAXATION AND CUSTOM UNION

On motivation and the need to fight tax dodging:

“I am driven by the wish [to] have social and tax justice”

“…in this fight [against tax dodging] I will be personally and deeply committed, because I think that it is, as well, something which is terrible, tax fraud, for our economies, which also reduces the capacity to work on deficits, and which is ethically, I would say morally, absolutely unacceptable.”

“The need for fairer corporate taxation remains a burning issue and will be on top of my agenda… continuing the fight against tax fraud, tax evasion and aggressive tax planning, and tackling base erosion and profit shifting, including in the digital economy, must be the unwavering goal, both within the EU and in our relations with international partners. This is a key element for confidence and well-functioning of our economies.”

On the Common Consolidated Corporate Tax Base (CCCTB), an EU proposal of unitary taxation that would allocate multinational companies’ profits according to the jurisdiction where their economic activity is taking place rather than relying on the current archaic arm’s length principle:
“The CCCTB proposal should be brought back into the spotlight. Not only does it offer major simplification for businesses and foreign investors, but it could also be a potentially powerful tool against tax avoidance."

On taxing the digitalised economy:
“Taxing an ever-increasingly digitised economy remains a pressing challenge and requires closer attention.”

On automatic exchange of information:
“…I will […] support the automatic exchange of information as a global standard.”

Responding to a question from MEP Anneliese Dodds (UK, S&D) on an EU blacklist of tax havens and the possibility of revoking bank licences for those banks involved in tax evasion activities:

“You finally asked me about tax havens.  I won't here give an answer which is definite because we've got to work on that.  But I can recall there an experience that I made as a Finance Minister when I presented a law on the banking system which is to say that all banks in France have to declare their activities in tax havens.  Should it be an example? You know, France sometimes here seems to be presented as a country which is not an example.  There, I think, there are good things which have been done.”

On the Financial Transaction Tax (FTT):
“....I would work towards the adoption of the Financial Transaction Tax, which can contribute to reducing systemic risk and therefore the likelihood of future crises.”

On negotiating with third-countries:
“…Discussions with Switzerland to dismantle unfair corporate tax regimes have been successful, and I would be in favour of opening similar dialogues with other third countries. This is key for the next mandate.”

On challenges with taxing intangibles:
“Companies' manipulation of intangibles to minimise their tax base has to be fully addressed. I intend to hold a frank debate with Member States on these issues.”

On monitoring member states:
"In 2015, I intend to report on Member States' progress in implementing the Recommendations on “tax havens” and “aggressive tax planning”. This will be the time to see what further steps are needed to protect Member States' tax bases against harmful regimes, in a coordinated way as well as to monitor progress in dealing with aggressive tax planning."

NEVEN MIMICA – INTERNATIONAL CO-OPERATION AND DEVELOPMENT

On how fighting tax dodging supports development finance: 

“In order to maximise aid’s impact …we need to help our partners to increase their national resources including through good governance, better financial management, fighting tax evasion, and fair and effective taxation system.” 

“If we manage to cope with tax evasion in a manner that….prevent(s)…..around €200 billion to evade taxation, then we should be able to find much more capacity to finance development. On the other hand if member states manage to do that then they will also be able to increase good governance, financial management, taxation incomes that will be easier to put into the overall development package.”

Responding to a question from MEP Juan Fernando Lopez Aguilar (Spain, S&D) on public registries on beneficial ownership:
“Combating corruption, money laundering and all other forms of misuse of development finance and misuse of the local resources, is an important part of the overall European development policy […] Short answer on money laundering and public registries. The answer would be yes, I am in favour of having this as public and comprehensive as possible.”

Responding to a question from Elly Schlein (Italy, S&D) on the issue of having a truly representative forum for international tax reform under the UN rather than the current negotiations under the OECD:
“When it comes to increasing the potential of developing countries to be a real partner and to develop their internal capacity to finance development goals, then I will be very much in favour of enabling at international level, at the UN level, the same approach and the same opportunity for developing countries to be part of these negotiations and talks on how to build common tax evasion mechanisms in the world.”

On capacity building of developing countries to counter tax evasion:
“I also see that our programs that assist good governance and capacity building in the developing countries, today they must be more and more focused on tax evasion.” 

JURKI KATAINEN – VICE-PRESIDENT FOR JOBS, GROWTH, INVESTMENT AND COMPETITIVENESS

On Country-by-Country Reporting:
“One issue has raised my interest: a country-by-country reporting system for multinationals. This is an important way of not over regulating but a good way of setting standards. […] In my eyes, it is representing a responsible social market economy. And also a good way of ensuring that companies are paying taxes.”

MARGRETHE VESTAGER: COMMISSIONER CANDIDATE FOR COMPETITION

On ongoing investigations into members states tax rulings related to Apple, Starbucks, Fiat and others:
"I think this is a serious issue. The majority of companies pay their taxes, but they see that other companies get special arrangements and lower taxes. I fully respect that taxes are a member state competence, but if it affects competition, then I'll look into how it can be stopped,"

“Large companies should not be allowed to organise themselves in way[s] that allows them to pay much less tax than other companies […] We will pursue the investigations, make sure they are substantial, and hopefully win the cases.”

When asked about the double Irish tax structure:
“What I have learnt in recent weeks is that a double Irish is not an Irish coffee.”

Conclusion
Following so many positive statements in the past two weeks, it is clear that tax issues are still at the top of the EU agenda and we can look forward to five very interesting years ahead of us. Eurodad and partners will make sure that this week’s political commitments will not be forgotten.