Tax rulings are not illegal and the European Commission will not question the system itself, EU Commissioner Pierre Moscovici explained during our weekly edition of “U Talking to Me?” The exchange of information on tax rulings between member states is a first step, and Moscovici said he would not be against citizens having free access to this information. On Greece, Moscovici deplored that the process to date has been too slow and he explained that a Grexit would be the beginning of the end for the euro.

The tax rulings are not to be condemned in principle, Moscovici made clear during the debate. But he is convinced that an exchange of information on tax rulings will force EU member states to have a fair approach on tax competition and companies will avoid tax abusive strategies.

“Tax rulings – and Mr. Bettel [prime minister of Luxembourg] is probably right about that – are not illegal and it does not have to be condemned. And we didn’t decide to forbid such tax rulings, that’s not the point. They can be useful for a company that decides to invest here or there. It is a matter of attractiveness,” he said.

“But the lack of information creates loopholes and also creates inequalities or situations where there can be abuses. And today, with our new regulation, we will have the obligation to have an exchange of information between administrations. Each three months, the Commission will be informed and if this is not respected there can be further infringements.”

But there are no sanctions foreseen in the mechanism. And Joachim Ciecierski – who joined the debate from Euranet Plus partner station Polskie Radio – asked the commissioner what would happen if an EU member state were to breach the rules.

“I cannot imagine who will say why they cannot respect that. I cannot imagine that. If yes, this country would have to explain why they feel that they can refuse transparency,” Moscovici said. “Who could refuse transparency to citizens today? I think that’s not possible.”

Moscovici seemed quite optimistic that this transparency will lead to the fact that “good rulings will evacuate the bad ones,” those that offer “loopholes or abuses and too aggressive tax strategies.”

But so far, EU member states have not shown much interest in exchanging information on tax rulings, a option which is already part of EU legislation. According to Moscovici, this will now change.

“There is a revolution – there is a new era, because it’s going to be mandatory,” he said. “They could…they don’t. They would…they don’t. Now, they will have to. That is quite different.”

For this new era to begin, more concrete initiatives must be taken by the Commission.

Moscovici will consider the publication of tax rulings - U Talking to Me? debate

Moscovici will consider the publication of tax rulings – U Talking to Me? debate

In a letter sent to Moscovici in November, the finance ministers of Germany, France and Italy said that “transparency is not enough” and called for “binding rules on corporate taxation to curb tax competition and fight aggressive tax planning.”

Gigi Donelli, of Euranet Plus Italian partner station Radio 24 – Il Sole 24 Ore, wanted to know when these rules could be expected. Moscovici responded by saying that an action plan on company taxation will be presented in June.

When asked why he had not proposed these rules at the same time as the ones on the information exchange, Moscovici asked: “Do you think that those texts are easy to finalise?” He added that the Commission needed to have impact assessments.

Olivier Hanrion from Euranet Plus partner RTBF, referring to standard practise in Belgium, asked why the Commission did not decide that information on tax rulings should be published.

“I am not against that. Personally I am in favour, and I think that President Juncker is also,” said Moscovici. “When you talk about publicity there is the word public in there. But again we need to have an impact assessment, because the question is also not to discourage the business. There are still debates inside the Commission and outside. I think that the European Parliament will raise the question, but I will consider that with sympathy,” he added.

Stavros Samouilidis, from the Greek Euranet Plus partner Skaï Radio, joined the debate and asked whether the Commission had changed its attitude toward Greece since Moscovici, in an interview with the German daily Die Welt, said that Greece could not be held in the eurozone at any price.

There is no change in the Commission, Moscovici replied, explaining that in the interview he was referring to the conditions Greece has to follow.

“I want to say and maybe that is why I spoke that way, that I think the progress is too slow. It is too sluggish. We need to go faster. And for that we need to have more confidence,” said Moscovici.

“It’s about trust building, what we are doing now. Time is of the essence and time is short. By the end of April, we need to have a detailed list of reforms. We need to solve the liquidity problems. We need to conclude the review for the present programme and after that we need to discuss for new arrangements. So we need to work with confidence.”

Listen to the whole audio below (or watch it above)

  • Author and presenter: Danièle Weber, Euranet Plus News Agency
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