Tue. Jun 6th, 2023

MEPs on Tuesday discussed with experts what new tax schemes the EU should most have on its radar when overhauling European and international tax policy.

The hearing, organised by the EP’s subcommittee on tax matters allowed MEPs to discuss with representatives from the OECD, the Commission, business consultancies and academics.

You can follow the meeting again here.

Opening the meeting, the Chair of the subcommittee Paul Tang (S&D, NL) underlined that the world of taxes is always in flux and policymakers needed to keep up so as to tackle tax fraud, evasion and avoidance. This was made all the more necessary due to the pressure the pandemic had put on public finances the world over.

During the hearing, many of the invited speakers focussed on how revenues from personal income tax could be seriously jeopardised due to the significant increase in the trend of ‘digital nomads’ because of the pandemic. This was especially stressed by Rita de la Feria of the University of Leeds who argued that a myriad of preferential tax regimes for personal income tax would lead to a race to the bottom in this area of taxation which, in turn, could significantly destabilise the system due to the important role of personal income tax for treasuries.

Paul Hondius from the OECD and Henrik Paulander from the Commission spoke about upcoming work their institutions were carrying out, also together, on the risk crypto-assets pose for tax transparency. Another Commission official, Ioanna Mitroyanni shared how her institution is working to fight the abuse of letterbox companies, notably by developing existing requirements. Isabel Verlinden from Price Waterhouse Coopers stressed the importance of qualitative transparency measures to rebuild trust in the tax system. She pointed to the most recently adopted EU tax transparency rules (DAC7) as being a potential game-changer.

MEPs zoned in particularly on the question of the rapidly changing environment of personal income tax asking, among other things, whether including such income in the scope for the code of conduct would be part of the solution. They also regularly raised the issue of taxation related to crypto-assets and the digital economy more widely. The invited experts were also asked how to best improve cooperation between national tax administrations and whether the Commission intended to pursue EU countries paying only lip service to the drive for cracking down on tax avoidance and aggressive tax practices.

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