4 Mar 2015 10:29am

Tax competition could destroy EU

Fiscal competition between EU member states could lead to the disintegration of the European Union, the chairman of the European Parliamentary tax rulings committee has warned

In a recent interview, French MEP Alain Lamassoure said that such an outcome would be “unacceptable”.

“Fiscal competition can be healthy when it contributes to sustaining a dynamic economy, especially by making companies more competitive, which in the end will lead to every European citizen enjoying better goods for a lower price,” he said.

“However, this competition is harmful when it sparks a fiscal war between the different EU member states and leads to the fragmentation of the single market and the disintegration of the Union.”

He added that the committee would start work shortly on concrete proposals that would bring transparency and fairness to the tax system.

“The committee only has a short mandate and an obligation to produce results.

“Within six months it will have to come up with proposals for tackling practices that erode the tax basis, strengthen administrative cooperation between tax services and work on more ambitious agreements on increasing transparency with parts of the world where opacity and complacency still reign.”

The committee was set up last month after the European Commission launched a series of investigations into tax rulings for multinational companies in Luxembourg, Ireland and the Netherlands.

Its brief is to look into EU member states’ tax rulings as far back as 1991, review how the EC treats their current state aid arrangements and how transparent they are about their tax rulings, and establish any negative effects that aggressive tax planning may have had on public finances.

Julia Irvine


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