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Commission plans move away from unanimity on tax matters

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European Commission president, Jean-Claude Juncker, gave new impetus to his call for a move towards allowing qualified majority voting on certain tax matters in his annual ‘state of the union’ address to the EU Parliament on 12 September.

Announcing the Commission’s proposal for qualified majority voting on common foreign and security policy, Juncker repeated the view expressed in his 2017 address, that the member states ‘should be able to decide on certain tax matters by qualified majority’.

In its ‘letter of intent’ to the presidents of the Council and the Parliament, the Commission set out its plan to identify ‘areas for a move to qualified majority voting’ in the interests of ‘more efficient lawmaking in the field of taxation’, by January/February 2019.

It is not clear whether the Commission intends to proceed by the legally complex route under TFEU art 116, which relies on the Parliament and the Council agreeing on legislation to eliminate distortion of competition in the internal market, or by a more direct political decision under TEU art 48.7, where the EU Council can authorise qualified majority voting on a specific issue.

The test for such a move could be provided by the proposed EU digital services tax, which the Commission wants to see adopted as an ‘interim’ measure towards finding a long-term solution on digital taxation at OECD/G20 level.

This was discussed at the informal ECOFIN meeting in Vienna on 7 and 8 September. Before the meeting, the Austrian finance minister, Hartwig Löger, stated that ‘the positions of the member states could not be more at odds’. In an official press release following the meeting, the minister said he wanted to see a digital services tax implemented ‘as soon as possible’, believing agreement by the end of this year to be ‘realistic’.

France and Germany are understood to want the inclusion of a ‘sunset clause’, ensuring the digital services tax would be a temporary measure, valid only until an agreement has been reached on an international level.

Commission vice-president Valdis Dombrovskis praised the efforts of the Austrian presidency towards seeing the ‘interim’ tax adopted. He also welcomed ‘positive signals from many member states’, saying he looked forward to ‘turning words into deeds’.