Tax Policy

Dear readers,

The Tax Policy Updates will go on hold for the summer, but will resume again in September. This is a special mini-edition before the break.

Looking forward to updating you all again in autumn, and wishing you an excellent break!

Johan

European Parliament narrowly endorses Ursula Von Der Leyen as new Commission President

On 16 July, European Parliament approved the appointment of the former German defence minister, Ursula Von Der Leyen (VLD), as the new European Commission President.

The vote was very narrow, with 383 in favour, 327 against and 22 abstentions. To be nominated she needed the support of at least 374 MEPs, meaning that in the end she ‘passed the line’ with a margin of just 10 MEPs.

The general consensus is that overall, she is too conservative and ambiguous for the Greens and segments of the Left, whilst in the view of many conservatives and the Right she made too many concessions to the Left. In other words, she tried positioning herself in the centre without really pleasing anyone.

On her tax commitments, this attempt to approach the Left whilst still staying true to her conservative background was clearly visible.

VLD outlined her tax priorities in a letter she sent to the liberal Renew Europe Group, the social-democrats as well as her general manifesto. According to these documents, VLD’s tax agenda for the next five years will consist of the following:

• Set up a carbon border tax
• Review the Energy Tax Directive
• Introduce qualified majority voting (QMV) in the Council for tax decision-making
• Introduce a tax on digital companies, and resume work on EU-specific solutions if OECD fails to find an agreement in 2020
• Deliver the Common Consolidated Corporate Tax Base (CCCTB)
• Proposals to “improve business taxation environment in the single market”
• Take stronger action against “harmful tax regimes” in third countries

These commitments, such as on CCCTB and QMV, may appear unrealistic given the continuing reluctance of a number of Member States to support these proposals. However, for VLD all that matters is that she makes the commitment to try. No doubt she and her conservative allies can count on the Council to reject them, enabling her to put the blame on a possible failure on the Member States.

In the meantime, it is unclear whether the European Parliament’s political Groups will continue their work on a joint work programme. The negotiations are currently in the freezer, but are yet to be officially abandoned.This curated content was brought to you by Johan Barros, Accountancy Europe policy manager since 2015. You can send him tips by email, follow him on Twitter and connect with him on LinkedIn.