By Francesca Amaddeo, Lecturer-Researcher, Tax Law Competence Centre (SUPSI), Manno, Switzerland
On 1 January, the Portuguese Presidency of the Council of the European Union presented its priorities’ program, including some tax policy issues.
Consistent with international aims, principles of fairness and tax efficiency will guide the European taxation framework.
Healthy competition and strong governance mechanisms are the keys. The focus is, once again, on the taxation of the digital economy and multinationals. The EU follows the global direction of pursuing tax transparency and fighting against tax evasion and avoidance, especially carried on through non-cooperative jurisdictions.
Indeed, the latest research by the Tax Justice Network shows that USD 427 billion in tax goes to tax havens. That’s not all: USD 245 billion is directly lost because of corporate tax abuses or aggressive tax planning.
It is well known that requests to boost the unveiling of the huge database covered by the country-by-country Reporting are on the agenda. Indeed, the concerning legislative proposal has been stuck in the EU Council since 2019
As the existing public country-by-country Reporting requirements for banks within the European Union have already disincentivized profit shifting to tax havens, it is reasonable to expect that the extension of such disclosure will contribute to filling tax gaps and strengthen the fair taxation dream.
And, this seems to be the idea of the Portuguese presidency.
A kind of non-subtle message arises from the programs’ wording, as follows:
“The Presidency will seek to create the conditions for reaching a political agreement on the revision of the rules on disclosure of information concerning tax on revenues for certain companies and branches.”
The introduction of the exchange of information has been the tipping point. It seems there is no place for secrecy and hidden planning. But is it really the case?
Dr. Francesca Amaddeo, PhD in European law and national legal systems, is an Italian lawyer that works as Lecturer-researcher at the Tax Law Competence Centre, Department of Business Economics, Health and Social Care, University of Applied Science and Arts of Southern Switzerland (SUPSI).