475 Plenary Session EESC Brussels 26 – 27 October 2011
475 Plenary Session EESC Brussels 26 – 27 October 2011
Commissioners Siim KALLASs and Dacian CioloŞ and two topics extremely important for Europe: integrated transport, common agriculture policy and rural development
Plenary session was structured in two thematic sessions:
Thematic debate on the new transport white paper attended by Siim KALLAS.
- TEN/454 Roadmap to a Single European Transport Area
The Transport 2050 Roadmap takes a global look at developments in the transport sector, at its future challenges and at the policy initiatives that need to be considered. Some 60 measures are proposed in this white paper aiming at developing a European transport system capable of shifting the balance between modes of transport, revitalising the railways, promoting transport by sea and inland waterways and controlling the growth in air transport. The Roadmap concludes that the transformation of the European transport system will only be possible through a combination of manifold initiatives at all levels. The various actions and measures indicated will be further elaborated. The Commission will prepare appropriate legislative proposals in the next decade with key initiatives to be put forward during the current mandate. Each of its proposals will be preceded by a thorough impact assessment, considering EU added value and subsidiarity aspects. The Commission will ensure its actions increase the competitiveness of transport while delivering the minimum 60% reduction of GHG emissions from transport needed by 2050
The European Economic and Social Committee (EESC) broadly welcomes the Roadmap to a Single European Transport Area. The EESC agrees that the 2050 vision goal of a greenhouse gas reduction of 60% in the transport sector, although very challenging, is in line with the EU's overall climate policy aims and that it strikes a reasonable balance between the need for quick reductions of greenhouse gases and the time needed to optimise energy efficiency in a single European Transport Area and develop new and sustainable fuels and propulsion systems in order to reduce dependence on fossil fuels
However, the EESC observes an important gap between the objectives, the ways in which they would be achieved and the financing required to achieve them. Therefore, the EESC recommends a better articulation between the Roadmap's strategic measures (up to 2050) and the more practical and immediate measures (2020 and 2030)
The EESC also recommends that sufficient financial means be allocated to transport infrastructure in the Multiannual Financial Framework post-2013.
Future projects also require better coordination between Member States and the EU institutions regarding criteria for planning and prioritisation and must also include the modernisation of existing infrastructure.
The EESC supports developing a strategy to provide Europe with transport that is efficient and genuinely sustainable and which takes economic, environmental and social challenges into consideration.
- ECO/302 CCCTB/Common Consolidated Corporate Tax Base
Companies which seek to do business across frontiers within the Union encounter serious obstacles and market distortions owing to the existence of 27 diverse corporate tax systems. These obstacles and distortions impede the proper functioning of the internal market.
In the absence of common corporate tax rules, the interaction of national tax systems often leads to over-taxation and double taxation, businesses are facing heavy administrative burdens and high tax compliance costs. The CCCTB is an important initiative on the path towards removing obstacles to the completion of the Single Market.
It is a system of common rules for computing the tax base of companies which are tax resident in the EU and of EU-located branches of third-country companies. Specifically, the common fiscal framework provides for rules to compute each company's (or branch's) individual tax results, the consolidation of those results, when there are other group members, and the apportionment of the consolidated tax base to each eligible Member State.
In designing the common base supporting research and development has been a key aim of the proposal. Under the CCCTB all costs relating to research and development are deductible.
MNEs would be relieved from the fact of certain tax obstacles in the single market and SMEs would incur less compliance costs when they decided to expand commercially to another Member State. The system is optional. Since not all businesses trade across the border, the CCCTB will not force companies not planning to expand beyond their national territory to bear the cost of shifting to a new tax system.
Harmonisation will only involve the computation of the tax base and will not interfere with financial accounts. Therefore, Member States will maintain their national rules on financial accounting and the CCCTB system will introduce autonomous rules for computing the tax base of companies. These rules shall not affect the preparation of annual or consolidated accounts. There is no intention to extend harmonisation to the rates. Each Member State will be applying its own rate to its share of the tax base of taxpayers.
Fair competition on tax rates is to be encouraged. Differences in rates allows a certain degree of tax competition to be maintained in the internal market and fair tax competition based on rates offers more transparency and allows Member States to consider both their market competitiveness and budgetary needs in fixing their tax rates.
Under the CCCTB, groups of companies would have to apply a single set of tax rules across the Union and deal with only one tax administration (one-stop-shop). A company that opts for the CCCTB ceases to be subject to the national corporate tax arrangements in respect of all matters regulated by the common rules. A company which does not qualify or does not opt for the system provided for by the CCCTB Directive remains subject to the national corporate tax rules.
Allowing the immediate consolidation of profits and losses for computing the EU-wide taxable bases is a step towards reducing over-taxation in cross-border situations and thereby towards improving the tax neutrality conditions between domestic and cross-border activities to better exploit the potential of the Internal Market.
The CCCTB notably contributes to reduced tax obstacles and administrative burdens, making it simpler and cheaper for SMEs to expand their activities across the EU. The CCCTB will mean that SMEs operating across borders and opting into the system will only be required to calculate their corporate tax base according to one set of tax rules.
The reduction in actual and perceived compliance costs is expected to exert a substantial influence on firms' ability and willingness to expand abroad in the medium and long term.
The present proposal includes a complete set of rules for company taxation. It details who can opt, how to calculate the taxable base and what is the perimeter and functioning of the consolidation. It also provides for anti-abuse rules, defines how the consolidated base is shared and how the CCCTB should be administered by Member States under a "one-stop shop" approach.
Finally, it is an important initiative within the priorities of the Europe 2020 strategy.
The EESC supports the proposal for a common consolidated corporate tax base (CCCTB) because it creates better conditions for companies that operate across borders.
Most of the tax obstacles to cross-border activity within the EU could be reduced or even eliminated with a CCCTB.
The EESC expects that even in the mid-term the draft directive will lead to a significant reduction in tax compliance costs and the removal of distortions in intra-EU competition caused by tax rules. With the CCCTB, business decisions in the single market will no longer be based on tax considerations. In this way, the CCCTB should promote fair, sustainable competition which has a beneficial effect on growth and jobs.
The CCCTB must take appropriate account of concerns about curtailed tax sovereignty and lower tax revenues. Member States must not suffer undue negative impact on their revenues and be able to predict the impact on their national accounts. Member States will remain free to set the tax rate on their share of the tax base. There is a concern that this will make Europe less flexible and competitive in competing for FDI, which will result in losing investment.
The EESC recommends that a socio-economic impact assessment be conducted on this.
The EESC believes that the CCCTB should be made revenue-neutral.
Differences in effective tax rates would be more transparent with the CCCTB. In the EESC's view, the CCCTB would not eliminate the importance of national tax rates for businesses' choice of location, because tax rates would continue to differ between the Member States even after its introduction.
The EESC welcomes the offsetting of losses against profits in different Member States (or consolidation) as the heart of the CCCTB rules. Only consolidation will eliminate current transfer pricing problems, make EU-wide tax-neutral restructuring possible and avoid double taxation. Since consolidation is the essential economic benefit of the CCCTB, the common tax base should include this element from the outset.
Regarding the scope of the CCCTB, the EESC no longer insists on its immediate mandatory application, but would endorse an optional arrangement during the introductory phase. In the long term, however, it should be mandatory, initially above a certain threshold.
The EESC welcomes the fact that the draft directive provides for the CCCTB to be used by businesses of any size, regardless of whether they operate across borders or only nationally.
Further clarification, in some cases significant, is needed with regard to individual rules. This is needed to avoid vastly differing transposition and hence differing application of particular rules of the directive between countries. The EESC considers the introduction of a one-stop shop for determining the tax base to be useful so as to simplify tax procedures, especially for small and medium-sized enterprises.
The EESC considers that the European Commission should give further consideration to the proposed system of apportionment. The current proposal, does not encourage or support the development of the smart economy.
ECO/303 Energy Taxation Directive
The revised Directive aims to restructure the way in which energy is taxed to support the objective of moving to a low-carbon and energy-efficient economy, and to avoid problems for the Internal Market.
Taxes on energy would be split into two components: one based on CO2 content and the other based on energy content.
CO2: A single minimum rate for CO2 emissions (EUR 20/t CO2) would be introduced for all sectors not covered by the EU ETS. This would provide a carbon price for these sectors of the economy. Renewable energy sources would not be subject to this CO2 element.
Energy: Minimum tax rates for energy would be based on the energy content of a fuel (EUR/GJ) rather than the volume. This means that a fuel will be taxed on the basis of the amount of energy that it generates, and greater energy efficiency will automatically be rewarded. The energy component of the tax will help to remove current distortions for competing energy sources (e.g. petrol and diesel) and will make taxation fairer for consumers because energy content is more important than volume when it comes to energy consumption. One GJ would be taxed in the same way, regardless of the product producing it.
Both CO2 and energy content elements would be combined to produce the overall rate at which a product is taxed. Member States will be free to set their own rates above the EU minima, and design their own structure for these taxes.
Social aspects are taken into account with the option for Member States to completely exempt energy consumed by households for their heating, no matter what energy product is used.
Long transitional periods for the full alignment of taxation of the energy content, until 2023, will leave time for industry to adapt to the new taxation structure.
- The proposal will favour renewable energy sources and encourage the consumption of energy sources emitting less CO2. At the moment, the most polluting energy sources are, paradoxically, the least taxed. On the contrary, biofuels are amongst the most heavily taxed energy sources in spite of EU’s commitment to increase the share of renewable energies in transport. The new proposal will remove these inconsistencies.
- The new text will also provide for a more coherent approach on energy taxation across the EU by preventing a patchwork of national policies and help to create a level playing field for industry across the EU. It is also an opportunity for Member States to redesign their tax policies in a way that promotes jobs and employment.
- As regards the reduction of greenhouse gas emissions, the revised Directive aims to complement the existing EU ETS by applying a CO2 tax to sectors that are out of its scope (transport, households, agriculture and small industries). These account for half of the EU's CO2 emissions; it is therefore important that they should also be covered by a CO2 price signal.
- Finally, this initiative will help the EU meeting its targets on energy and climate change, as requested in the March 2008 European Council conclusions.
The Committee supports the efforts of the European Commission – The Energy Taxation Directive ETD enables Member States wishing to do so to shift part of the burden of taxation from labour or capital to a form of taxation which encourages environmentally responsible behaviour and is favourable to energy efficiency, in accordance with the Europe 2020 strategy.
In order to succeed in achieving its energy policy objectives, Europe must send out a strong "price signal".
The CO2 tax factor complements the Emission Trading Scheme (EU ETS).
However, the EESC regrets that the recast ETD is not more ambitious and coherent. The Commission took the initiative of including exemptions and derogations in the text designed to please certain Member States or not displease others.
While it clearly must encourage Member States to make allowance for a minority of sensitive cases, it must nonetheless maintain the course set for European energy objectives and stress the strategic advantages of innovation in new energy sources, job creation and spin-off growth, improvements in the quality of life, etc.
More concretely the EESC notes that electricity is not subject to this alignment with other energy sources.
Furthermore, the price signal given by taxation is not getting across when it comes to heating fuels and the recast ETD may not change this.
The stronger incentive for consumers to economise on fuel would also benefit companies in the sector by accelerating the renewal of equipment and offering new market opportunities.
Highly energy-intensive industrial sectors which were previously excluded from application of the ETD are now rightly reintegrated.
However, other sectors (such as agriculture, construction, public transport etc.) remain wholly or partly exempt.
It is difficult to see any coherence in all these exemptions, particularly as the need for them may not be understood by those who do not benefit from them.
The new ETD does not present a recommendation regarding the use by the Member States of all or part of the revenues.
Vladimíra Drbalová
International organisations and EU
Member EESC
