Moscovici slams ‘headstrong’ Ireland for blocking EU digital tax

EU commissioner says State among handful of countries blocking initiative

Pierre Moscovici, the EU Commissioner for Economic and Financial Affairs, Taxation and Customs, has called for a united front from member states on taxing internet companies - a move Ireland has opposed. Video: European Commission

 

“A handful of headstrong states . . . regrettably” have blocked EU taxation of the digital giants, EU commissioner Pierre Moscovici on Wednesday complained to MEPs.

The Republic has consistently expressed opposition to the digital tax proposal.

The economic affairs commissioner was speaking at a debate on “fair taxation for a just society” in the European Parliament plenary session in Strasbourg on Wednesday afternoon.

“We have placed the EU at the forefront of this fight. Thanks to the support of public opinion and the media, we managed to convince member states to strengthen our toolbox in the fight against fraud and tax optimisation,” he said.

“Since 2014, and despite the barrier of unanimity, we have succeeded in adopting 14 proposals, of which eight were against fraud and tax optimisation. That’s more than over the previous 20 years!”

Although finance ministers on Tuesday expressed scepticism about Mr Moscovici’s proposals to end unanimity voting on tax matters, the commissioner insisted that the digital tax debate “shows clearly the limits of unanimity”.

“These limits can be overcome in reaction to tax scandals and strong public opinion, but it can also paralyse us when it comes to structural reforms.”

He told MEPs that the commission’s proposal “has now spent 10 months on the table”.

“Though we have convinced a large majority of member states – 25 countries out of 28 – a handful of headstrong countries are still blocking. This is regrettable.

“On one hand, our citizens wanted us to put an end to this clear injustice. On the other, some member states like France, Spain and the UK are now starting to advance alone [with their own digital tax proposals], a risk for the integrity of our single market,” he warned.

Money laundering

 Separately, the European Commission has added Saudi Arabia and Panama and a number of other jurisdictions to a blacklist of states that it says pose a threat because of lax controls against terrorism financing and money laundering.

Brussels has no power to impose sanctions on territories on the list, but European banks must carry out additional checks when dealing with counterparts in the listed countries. Listed territories also become subject to a process of EU monitoring and must reform in order to be removed from the blacklist

In total 23 jurisdictions are listed: Afghanistan, American Samoa, the Bahamas, Botswana, North Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands and Yemen.

France, Germany and the UK are reported to be unhappy at what they see as an excess of zeal in the listings compared to other international authorities.