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Commission States Position On Majority Voting In Relation To Tax

by Ulrika Lomas, Tax-News.com, Brussels

12 November 2003


As member states continue to haggle over the terms of the draft European Constitution, the Commission has revealed its position on the issue of Qualified Majority Voting with regards to taxation, letting it be known that it is in favour of a dilution of the national veto in certain circumstances.

"In the draft Constitution, there are still numerous provisions for unanimous voting in the Council or similar decision-making arrangements (consensus within the European Council or agreement by the governments of the Member States),” said the Commission as it set out its position.

“It would be unrealistic to ask for all these to come under qualified majority voting and would not moreover be appropriate, given the great diversity of the cases in question. In certain fields, the Constitution will need to be revised to enable the Union to operate effectively.”

According to the Commission, more precise demarcation of the Union’s authority should, in some cases, enable unanimous voting to be dispensed with. For example:

• taxation in connection with the operation of the internal market, i.e.

- modernising and simplifying existing legislation,

- administrative cooperation

- combating fraud or tax evasion

- measures relating to tax bases for companies, but not including tax rates;

• the aspects of free circulation of capital linked to the fight against fraud;

• taxation in respect of the environment.

“Some Member States do not think it desirable to extend qualified majority voting to taxation. This view is not shared by the European Commission, which considers that QMV is necessary in some areas of taxation,” states the EU executive.

“With ten new Member States to join the Union in May 2004, retaining unanimity for all taxation decisions would lead to protracted discussions and may even make it impossible to achieve any of the tax co-ordination necessary to Europe,” the Commission claims.

The Commission also emphasized that such a position will not lead inevitably towards tax harmonization, nor increases in taxation. “QMV in taxation is aimed at ensuring the compatibility of the Member States' tax systems with each other and with the Treaties,” the executive maintains.


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