EU announces plan to scrap member state veto on tax policy
The European Commission has proposed scrapping member states’ veto on tax policy, in a move that could see levies imposed on EU countries against their will.
Brussels says the requirement of unanimity for tax policy is out-dated and that moving to a system of qualified majority voting would help speed up the legislative process.
The bloc has struggled to agree ambitious policies such as a tax on US tech giants because of opposition from low-tax countries such as Luxembourg and Ireland.
The idea was immediately rejected the Irish government, with a spokesperson saying it “does not support any change being made to how tax issues are agreed at EU level”.
Launching the policy in Strasbourg on Tuesday, European Commission president Jean-Claude Juncker said he was “strongly in favour of moving to qualified majority voting and a stronger voice for the European Parliament on the common future of taxation in our Union”.
EU budget commissioner Pierre Moscovici said: “The EU has had a role in taxation policy since the origins of the Community six decades ago. Yet if unanimity in this area made sense in the 1950s, with six Member States, it no longer makes sense today.
“The unanimity rule in taxation increasingly appears as politically anachronistic, legally problematic and economically counterproductive. I am fully aware of how sensitive an issue this is, but that cannot mean that the discussion is off limits. So let’s begin this debate today.”
As well as broader tax policies, the Commission wants to be able to react more quickly to scandals such as Luxleaks, and also end the practice of member states giving sweetheart deals to multinationals.
The proposal would need to get past the European Parliament and European Council, where it is expected to face opposition.
To make the move more palatable the Commission has suggested a gradual move, with policies on tax fraud and evasion moving to qualified majority first. The veto would the be ended on tax policies linked to other goals such as fighting climate change or improving public health.
Other policy areas, such rules governing corporation tax and VAT, would follow - with final implementation expected to be around 2025.
