Speech: Remarks by Vice-President Dombrovskis at the ECOFIN press conference

Thank you, Edward.

First of all, let me offer the sincere condolences to the families and friends of the victims in Manchester. We stand united in our sorrow and condemnation - and in the fight against terrorism.

Moving to today's ECOFIN agenda we today took stock of some of our financial and tax reform files - and pushed the momentum where necessary.

We have discussed the Proposal for a directive on Double Taxation Dispute Resolution Mechanisms. I would like to thank Maltese Presidency for bringing forward this item and welcome the progress reached on the General Approach.

This proposal is very important for several reasons. Firstly, it delivers on our promises to make the tax environment in the EU more efficient, transparent and fair. It is also an integral part of our Action Plan on Corporate Taxation adopted in June 2015.

Secondly, tax disputes between Member States are a serious impediment to cross-border investment. Removing it contributes to one of the major priorities of this Commission, namely facilitating investment.

The new mechanism is more efficient, since it is more binding. It provides for mandatory resolution of double taxation disputes, if necessary by way of arbitration with strict and enforceable timelines. At present, most Member States have bilateral tax treaties with each other to relieve double taxation when it occurs, and there are procedures to resolve disputes when necessary. However, these procedures are long, costly and do not always result in an agreement.

Our proposal aims to increase legal certainty by broadening the scope of dispute resolution to businesses and citizens. It also brings more fairness as, unlike the existing system, in case of non-application it foresees the possibility of an appeal in a Court. Also, it introduces an additional element of transparency. Member States not only have to solve the cases of double taxation, but also make them public.

I would like to congratulate the Maltese presidency for the agreement reached; we believe the proposal is balanced and reflects a good compromise over the issues that raised divergences between Member States;

The idea that taxes should be paid where actual economic activity is taking place is now well-established. Making sure that profits are not taxed twice is an important complement to that.

We also had an open debate on another major tax file: the proposal for a directive on a Common Corporate Tax Base.

As you remember, given the complexity of the measures proposed, we had opted for a staged approach. At the first stage, we intend to reach a political agreement on the rules for calculating a common corporate tax base, including certain provisions against tax avoidance. Consolidation is left for the second stage.

We take note of the wish of some Member States to have broader flexibility and are ready to carry on the discussion. At the same time, we need to keep our eyes on the overall goal of greater harmonisation and the simplification that consolidation offers.

There was a broad consensus on this general principal today, but obviously more work is needed to be done in the months to come, in order to reach an agreement.

I am pleased also with the discussions we had today about national barriers to capital flows and how to tackle them.

We have said many times that responsibility for creating a real Capital Markets Union lies not only at EU level. Member States have an essential role to play. There are still barriers to capital flows that have nothing to do with EU law and which need to be removed at national level.

Today the ministers have agreed on a roadmap proposed by the Commission to lift such national barriers. We welcome their commitment and will look forward to the implementation of the roadmap, as well as continuing to work with national experts for mapping and addressing other possible barriers to cross-border capital flows.

It was also the first time when the Economic and Financial Committee (EFC) Report on capital movements and the freedom of payments was discussed at ministerial level.

This Report clearly shows that a lot still needs to be done to support the economic recovery and to make the EU an attractive investment destination. At the level of the Commission, we will continue with our actions in different fields - both internally and towards the outside world - to support the dismantling of barriers and to promote sustainable economic growth.

As for the legislative files on financial services we discussed, I would like to emphasise securitisation, where we are inching closer to an agreement with co-legislators. A few issues still need to be addressed, however, notably in relation to the hierarchy of methods to calculate capital requirements, third party certifiers and prudential requirements.

Today's discussion was fruitful, so I hope we can get to the agreement soon.

Lastly, the Council adopted its conclusions on the In-Depth Reviews and implementation of the 2016 Country-Specific Recommendations. This provides a good basis for the next phase of the European Semester: discussions on this year's Country-Specific Recommendations, which the Commission adopted yesterday.

Yesterday, we have also updated our assessment of the implementation of recommendations: Member States made at least "some progress" on around two thirds of recommendations issued till 2016. In the multiannual perspective, progress is better, reflecting also the measures undertaken at the height of the crisis.

So there is progress, yet it remains uneven across policy areas, countries, and over time.

We have highlighted that the Commission - through its Structural Reform Support Service - is ready to provide technical support to reform efforts. The new Structural Reform Support Programme is now up and running. We are glad to see the widespread interest expressed by many Member States in requesting technical support for the design and implementation of structural reforms.

I am confident that the new Programme will also help the interested Member States with timely and effective implementation of reforms in response to the Country-Specific Recommendations.

Thank you very much.

SPEECH/17/1444