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Moscovici Defends EC's Stance On Tax

by Ulrika Lomas, Tax-News.com, Brussels

14 September 2015


European Tax Commissioner Pierre Moscovici has said that the Commission is not seeking to harmonize minimum tax rates and instead wants to ensure that everyone pays a "fair share" of tax.

Moscovici made the remarks at a press conference following an informal meeting of the Economic and Financial Affairs Council (ECOFIN). He said there had been a "very useful and also a very necessary exchange of views on how to ensure that companies that generate their profits in the European Union (EU) pay their fair share of tax here in the EU."

According to Moscovici, the focus of participants' debate was "effective taxation." He told reporters that while the Commission is determined that "profits generated in the EU are taxed at an appropriate level where the activity takes place," this does not mean "harmonizing minimum tax rates."

Moscovici explained: "It means agreeing on the principle that everyone should pay their fair share. Because in the end, it's other businesses – and SMEs in particular – and ordinary citizens, who have to pay the price of this tax avoidance, either through higher taxes and/or public spending cuts. We need to have strong public services and we need to have tax fairness in our countries."

In June, the Commission presented an Action Plan containing a series of anti-avoidance initiatives. It includes a framework to ensure effective taxation where profits are generated and a strategy to relaunch the Common Consolidated Corporate Tax Base.

Commenting on the Commission's work in this area, Moscovici said: "It is hard to argue against the fundamental principles of the plan, but of course there has been a lot of discussion about how we get there." He acknowledged that there is no consensus among member states "on how we define effective taxation, nor how we achieve it." He did nevertheless welcome the fact that Europe's finance ministers "agree that effective taxation must lie at the heart of EU tax policy from now on," describing this as major progress.

He urged colleagues to maintain the political momentum needed to deliver results.

TAGS: compliance | tax | business | tax compliance | tax avoidance | ministry of finance | tax planning | tax rates | European Union (EU) | services | Europe

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