EP Committee draft report demands EU rules for tax advisers advising governments

On 20 July 2015, MEPs Elisa Ferreira (Social Democrats, Portugal) and Michael Theurer (Liberals, Germany) from the European Parliament´s Special Committee on Tax Rulings and other Measures similar in Nature or Effect (TAXE) presented the Committee´s draft report. The extensive text is a synopsis of all tax policy topics currently discussed.

As to tax advisers, the rapporteurs are concerned about possible conflicts of interest where tax firms advise both the government and private clients and calls for the development of an EU incompatibility regime and invited the Commission to consider sanctions on firms which engage in aggressive tax planning by refusing them EU funding and advisory roles in EU institutions.

On tax policy, the draft report essentially recommends:

  • Cross-border tax rulings should be established jointly with all countries involved. Information exchange should be exchanged on all, not only cross-border, rulings, and the Commission should consider public disclosure of rulings, respecting confidentiality.
  • The introduction of a mandatory CCCTB with consolidation in a second step, as announced by the Commission on 17 June. The legislative proposal should clarify the tax treatment of research & development, provide for definitions of permanent establishment and economic substance, and contain minimum and maximum effective tax rates.
  • The current reform of the state aid framework should provide further clarification on state-aid through tax measures.
  • The Code of Conduct Group on Business Taxation should be reformed and the Arbitration Convention should be reshaped and made more efficient.
  • A set of country by country tax information should have to be published and further information should be reported to and exchanged between tax administrations.
  • Whistleblowers should be protected.
  • For blacklisting and possible measures against tax havens, a genuine EU benchmark containing transparency, fair tax competition and effective taxation criteria, should be developed.

The (non-legislative) report will conclude the work of the TAXE Special Committee. The TAXE vote is scheduled for 15 October, the EP´s plenary vote for 24 November 2015.

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