Speech: Speaking points by Commissioner Šemeta at the ECOFIN press conference

European Commission

[Check Against Delivery]

Algirdas Šemeta

Commissioner responsible for Taxation and Customs Union, Statistics, Audit and Anti-fraud

Speaking points by Commissioner Šemeta at the ECOFIN press conference

Economic and Finance Ministers Council

Brussels, 8 July 2014

Before I comment on the Italian Presidency Work programme, I would like to first thank the Greek presidency for all it achieved in the tax field.

I'm not only speaking about the new legislation they succeeded in getting adopted [notably the revised savings and parent/subsidiary directives] but also the groundwork they did on many files, which should bring future successes.

So, thanks to you and your team for this, Gikas.

Turning now to the current Presidency's work programme, I very much welcome the priorities and clear sense of direction that Italy has presented.

As stated by the European Council, the amendment of the Administrative Cooperation Directive should be adopted by the end of the year.

I am confident that the Presidency will drive discussions forward to achieve this, and I can assure you all that the Commission will do everything needed to support this goal.

On our side, we are making good progress in the negotiations with third countries for new Savings Agreements. The Commission will keep the Council regularly informed on the state of play of these negotiations, as I will do later today.

Considering the developments on curbing tax fraud and tax evasion at global level, your Presidency will have a crucial role in coordinating, defining and driving forward the EU position at global level on the Base Erosion and Profit Shifting project.

It will be important to ensure that the positions of EU member States are well coordinated in this context.

Following agreement at last month’s ECOFIN, the formal adoption today of the important revision to the Parent-Subsidiary Directive is a good step forward.

I know I can count on the Presidency continue this progress through the discussions on the general anti-abuse clause and on the pending Interest and Royalty proposal.

As regards the Common Consolidated Corporate Tax Base proposal, we have had three years of technical discussions on this file.

It is now time to take stock of this at political level and to define the way forward on this important proposal. I therefore welcome the Presidency's intention to hold an orientation debate on the CCCTB at Ministerial level.

In terms of other files, priority should be given to the discussions on the Financial Transaction tax under enhanced cooperation.

As the participating Member States announced in May, they should agree on the implementation of the first step of the FTT before the end of this year, with the ultimate goal of a broad based tax.

In the VAT field, I encourage the Presidency to take forward negotiations on the Standard Declaration, which offers enormous savings to businesses and administrations. We should strive for agreement on this before the end of the year.

It is also important to conclude discussions on the VAT treatment of vouchers under the Italian Presidency.

This file must be agreed before the new rules on the place of supply come into effect in 2015, in order to reduce the risk of tax losses.

Finally, I am very pleased that Italy aims to have a political agreement on the revision of Energy Taxation Directive.

Negotiations on this significant proposal have been long, and it will take concessions by all parties to successfully complete them.

However, any compromise should add value to the current Directive, and it certainly must not lead to any dis-harmonisation of energy taxation in the EU.

Let me conclude now by saying that I have every confidence in the Italian Presidency's ability to deliver good progress in EU tax policy over the next 6 months.

Your commitment and leadership, Pier Carlo, together with the recognised skills of your team, will certainly ensure tangible results, even in the midst of much institutional change.

On Savings tax negotiations:

Let me start by thanking the Italian Presidency for putting this topic on the agenda today.

Last March, the Council set a deadline by the end of the year for the Commission to successfully renegotiate the existing EU Savings Agreements with Switzerland, Liechtenstein, Andorra, Monaco and San Marino.

You will recall that, at that time, I reported good progress with the five non-EU countries. Most importantly, we had established the principle that the revised savings agreements would be based on automatic exchange of information.

Over the past three months, the process has advanced considerably. This reflects our determination not to allow the negotiations to fall behind developments at EU level in this field.

Let me summarise the state of play, briefly:

First, the global standard has become the exclusive focus of negotiations. This improved scope of the negotiations meant that 3 of the countries - Switzerland, Andorra and San Marino - needed to seek enhanced negotiating mandates.

I can assure you that this is a necessary formality, and no threat to the negotiations themselves. Since this issue was raised San Marino has confirmed its readiness to negotiate on the basis of the global standard.

In addition those states formalising mandates are fully committed to continuing technical discussions on the future agreements, while the procedure to update their mandate is underway.

Switzerland has publicly committed itself, unreservedly, to the Global Standard at the OECD i. So has Andorra. Liechtenstein is committed to being an early adopter. Second, many specific points have already been discussed. Clarifying technical issues, such as beneficial ownership, customer due diligence and data protection, at this early stage, will ensure that these matters do not take up time later, when deadlines for signing the agreements loom.

Third, we are also placing great emphasis on establishing implementation timeframes. It is not enough for the five to commit to the Global Standard; we need to know when they will move.

Within the EU, Member States themselves are pushing for early adoption. We have brought the same sense of urgency to the negotiating table, mindful of the emerging international criteria, particularly for financial centres.

Fourth, key reporting systems are also being discussed. Technical meetings have been planned, which will bring our experts together to ensure a comprehensive and compatible network for banks and tax administrations, when the time comes to transfer information.

Finally, negotiations have also identified certain requests from some of our interlocutors, notably on the regularisation of past liabilities. They also have interests in accessing financial markets.

However, we have made it clear that the savings agreements will not be linked to other EU-level agreements. Market access is not part of our negotiating mandate - which I believe the third countries now acknowledge. And the issue of regularising past liabilities is to be taken up directly with the Member States concerned.

All in all, the negotiations are progressing well, in a constructive spirit and at an effective pace. The challenge I see now is to ensure that EU legislation is aligned to the Global Standard swiftly and without any delays. If this is the case, I am confident that the savings agreements with the five third countries will follow alongside, within the planned timeframe.

On that basis, I fully expect to have the text of the agreements put before the Council for approval before the end of the year.