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Today hearing in the European Parliament on the impact of #Brexit on #taxation. Interesting list of speakers!
Main question is: will UK become a #taxhaven and what should EU do against this.
A few personal reflections, I share in this thread. Feedback welcome #TaxTwitter
https://twitter.com/EP_Taxation/status/1354005477676490752
Main question is: will UK become a #taxhaven and what should EU do against this.
A few personal reflections, I share in this thread. Feedback welcome #TaxTwitter
https://twitter.com/EP_Taxation/status/1354005477676490752
I will focus on corporate income tax. I see losses, observations, threats & opportunities for the future. I might be less pessimistic than some, for others too optimistic. The point of reference being the EU-UK Trade & Cooperation agreement! Full text: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22020A1231(01)&from=EN
[LOSSES]
No non-regression clause on tax matters and no rebalancing measures.
Tax matters not in scope of dispute settlement.
Scope of tax matters limited mostly to OECD standards, including on countering harmful tax practices. Code of Conduct will no longer apply.
![[LOSSES] No non-regression clause on tax matters and no rebalancing measures. Tax matters not in scope of dispute settlement. Scope of tax matters limited mostly to OECD standards, including on countering harmful tax practices. Code of Conduct will no longer apply.](https://pbs.twimg.com/media/Esp47gNXAAEVP1o.png "[LOSSES] No non-regression clause on tax matters and no rebalancing measures. Tax matters not in scope of dispute settlement. Scope of tax matters limited mostly to OECD standards, including on countering harmful tax practices. Code of Conduct will no longer apply.")
No non-regression clause on tax matters and no rebalancing measures. Tax matters not in scope of dispute settlement. Scope of tax matters limited mostly to OECD standards, including on countering harmful tax practices. Code of Conduct will no longer apply.
[OBSERVATIONS]
Parent subsidiary and interest/royalty directive no longer apply to the UK.
ECJ rulings do not impact anti-tax avoidance rules such as CFC.
UK now will fall out of the DAC regimes on exchange of information.
Parent subsidiary and interest/royalty directive no longer apply to the UK. ECJ rulings do not impact anti-tax avoidance rules such as CFC. UK now will fall out of the DAC regimes on exchange of information.
[THREATS]
I do disagree with the idea it would suddenly become easier for the UK to become a tax haven. Some rightfully point out that it might be easier to be a tax haven inside the union. Also inside the Union the UK could have lowered its rate significantly.
I do disagree with the idea it would suddenly become easier for the UK to become a tax haven. Some rightfully point out that it might be easier to be a tax haven inside the union. Also inside the Union the UK could have lowered its rate significantly.
OECD standards on exchange of information are less extensive than those at EU level. Treaty shopping.
Current public cbcr proposal by the Commission does not request disaggregation for non EU member states (except if they are on the blacklist). So UK would be excluded.
[OPPORTUNITIES]
EU member states can apply stronger CFC rules as UK is third country.
Withholding taxes on outbound payments. Consider a common withholding tax and start by unblocking interest and royalty directive in Council. Interesting proposal by @FEPS_Europe on this!
EU member states can apply stronger CFC rules as UK is third country. Withholding taxes on outbound payments. Consider a common withholding tax and start by unblocking interest and royalty directive in Council. Interesting proposal by @FEPS_Europe on this!
EU has important tools to monitor the UK such as the list of non cooperative jurisdictions and the high risk third country list in the money laundering domain. Both need strengthened criteria and objective assessments.
Include high minimum effective tax rate in EU listing criteria to avoid race to the bottom in rates.
Best way to "compete" with the UK is by providing a better, simpler & fairer tax system. Time to finalize the CCCTB including in it a minimum rate & digital economy angle.
EU needs to dare to be political and exert its power. Access to EU market for financial services market for example should be bound to good standards on money laundering and taxation. Let's not shy away.
Happy to debate! Contradictory political declarations & many provocative ones by Boris Johnson do not help e.g. on opening free ports.
cc @robertnpalmer @_mattjthompson @PaezWrites @JudithFreedman @alexcobham @DanNeidle @JudithFreedman @delaFeriaR @RichardJMurphy @Hamza_M_Ali
cc @robertnpalmer @_mattjthompson @PaezWrites @JudithFreedman @alexcobham @DanNeidle @JudithFreedman @delaFeriaR @RichardJMurphy @Hamza_M_Ali
