MEPs criticise EU exchange of information directive

The EU Commission proposal to make it mandatory for EU member states to exchange information on their tax rulings has been criticised by the European Parliament’s Economic and Monetary Affairs Committee. A report by MEP Markus Ferber expressed disappointment at the directive’s limited scope and late entry into force, which last week’s ECOFIN Council deal ‘watered down even further’.

‘If this is the final text, member states will have missed a great opportunity to create more transparency in taxation,’ Ferber said of the new rules, which apply from 1 January 2017. ‘National budgets will continue to suffer. We need an EU-wide systematic and mandatory procedure. For the moment, member states’ tax authorities would not realise that tax ruling deals forged in other member states are undermining their own tax bases. Tax authorities should be obliged to exchange information on tax rulings and make them available to a central database at the European Commission, [which] must be empowered to access and use the data to investigate tax avoidance and dumping practices and to assess whether they are in line with state aid rules.’