Breaking News

EU smaller states say no to end of veto on tax reforms

Stock MarketsFeb 12, 2019 11:45
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Pierre Gramegna, Luxembourg's Finance Minister arrives in Downing Street, London

By Francesco Guarascio

BRUSSELS (Reuters) - Finance ministers from smaller European Union states on Tuesday opposed a plan to limit governments' power to block EU reforms on tax matters, in a move that further reduces the chances of introducing an EU levy on large digital firms.

EU countries with smaller populations have for years blocked efforts to narrow loopholes that allow tax evasion and in some cases even money laundering in the bloc.

Many of them defend their right to decide their own tax laws and attract foreign business by offering sweeteners.

In an attempt to break the deadlock, the EU executive commission proposed last month to gradually remove the veto power that states wield on the overhaul of tax rules.

But at the meeting in Brussels, Luxembourg, Malta, Lithuania, the Netherlands and Sweden called for maintaining their veto power. The opposition of only one of them would be sufficient to block the planned overhaul in the whole 28-nation bloc.

The Commission had proposed to gradually move to majority voting on some minor tax issues, but crucially permitted states to decide on this structural reform by unanimity.

The Commission, led by Luxembourg's former prime minister Jean-Claude Juncker, declined to use a neglected rule that would allow tax reforms to be adopted by a majority, a move that could have effectively ended the veto power when competition is distorted.

Luxembourg's Finance Minister Pierre Gramegna was among the most vocal of those against the reform proposed by the Commission. He told reporters that to preserve the unanimity on tax decisions was "extremely important".

The tiny state wedged between Germany and France for years blocked EU anti-tax evasion rules that require the exchange of information on bank accounts held by foreign citizens.

It is also one of the staunchest opponents to the introduction of a common tax base in the EU that would limit countries' power to offer sweeteners to large corporations.

Other smaller states, led by Ireland, have blocked a common tax on digital revenues. This has pushed several countries, including France, Italy and Spain, to adopt similar levies at national level, despite risks this could weaken the EU market.

A new attempt for a watered-down EU-wide digital tax could be made in coming weeks, but has little chance of succeeding.

In proposing an EU-wide digital tax last year, Brussels said the levy was needed to restore fair competition in the bloc and end practices that allow large multinationals such as Google (NASDAQ:GOOGL), Facebook (NASDAQ:FB) or Amazon (NASDAQ:AMZN) to cut their tax bills by moving their continental profits to low-tax countries such as Luxembourg or Ireland.

Germany and France, the two largest states in the EU, supported the commission's plan to decide by majority on some tax matters. In a joint news conference with his French peer, German Finance Minister Olaf Scholz said the reform was needed to improve decision-making in the EU.

EU smaller states say no to end of veto on tax reforms

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email