51 / 150
EU ECONOMIC POLICY IN 2016. AN INCOMPLETE EMU: TOWARDS A FISCAL UNION
51
Greater corporate transparency by means of
country-by-country reporting
The most recent amendment to the DAC in
2016, which made the automatic exchange of
information between national tax administra-
tions on country-by-country reporting compul-
sory, was done to ensure that member states
transposed political commitments under BEPS
into their national systems in a coherent and co-
ordinated fashion (Action 13). However, this
measure stopped short of requiring public access
to information contained in country-by-country
reports. Following the release of the Panama pa-
pers a proposal was made to amend the Direc-
tive once again to make the content of country-
by-country reports available to the public. If
approved by the Council, such an amendment
would allow the general public and investors to
track the fiscal behaviour of multinational com-
panies.
An EU list of tax havens
One of the initiatives related to taxation to have
moved up several notches on the community
agenda over the past few months is a proposal
to create a European blacklist of the tax havens
most often employed for tax avoidance purpos-
es. There is no doubt that a single list accepted
by all member states would carry much more
weight than the patchwork of lists currently em-
ployed at the national level in efforts to pressure
non-EU countries refusing to comply with com-
munity tax good governance standards. Such a
list would also prevent tax planners from abus-
ing mismatches between national lists of tax
havens.
To this end, during the January 2016 presen-
tation of its anti-tax avoidance package, the
Commission announced its intention to draft a
community list of non-cooperative third-country
tax jurisdictions. On November 8, 2016, Ecofin
members approved a series of criteria that need
to be considered when determining whether a
country should be classified as a non-coopera-
tive jurisdiction. The first of these is whether a
country has committed to and started the legis-
lative process to effectively implement the
OECD international standard
7
.
The second is whether it maintains harmful
tax regimes meant to attract offshore opera-
tions that deprive EU countries of legitimate tax
revenue and favour the creation of offshore
structures without economic substance.
The third is whether a country has received a
positive peer evaluation as regards the imple-
mentation of anti-base erosion and profit shift-
ing (BEPS) measures. It is striking that the crite-
ria established to date for identifying
non-cooperative jurisdictions do not include
determining whether a country imposes corpo-
rate taxes or if it does, if the rate for that cate-
gory of tax is zero or ridiculously low.
However, the most glaring defect of the ten-
tative blacklist currently being circulated is that
the possibility that it might include a member
state seems to have been ruled out from the on-
set. As mentioned earlier in this chapter, there is
a notably high level of fiscal competition within
the highly-integrated economy and single mar-
ket of the EU. The sweetheart tax arrangement
Apple has negotiated with Ireland and similar
cases being investigated by the Commission
have made it clear that certain member states
are actively abetting corporate tax avoidance.
7
The Common Reporting Standard (CRS) was approved
by the Council of the OECD on 15 July 2014 and the G20
presented its Common Reporting Standard Implementation
Plan later the same year.