VALLETTA, April 8 European Union states should
continue reforming corporate rules to tackle tax avoidance, EU
tax commissioner Pierre Moscovici told finance ministers on
Saturday, as some smaller nations urged slower reform to avoid
scaring away big corporations.
In a paper to be discussed at a meeting of EU finance
ministers in Valletta on Saturday, Malta, which holds the
rotating EU chair until July, said EU tax reforms would increase
uncertainty, harming investment and trade.
It suggested states should be given more time to adapt to
Addressing the ministers, Moscovici opposed Malta's view and
said the biggest source of uncertainty would be to maintain a
"status quo" where EU states compete with each other on
corporate tax policy.
Many large U.S. corporations have set up their headquarters
in smaller EU states, allowing them to cut their tax bills due
to more lax tax rules.
Following recent revelations, such as the Panama Papers, of
widespread tax evasion and avoidance by big corporations and
wealthy individuals, the European Commission has made several
legislative proposals to close legal loopholes. However, some of
the most ambitious plans have yet to be approved by EU states.
Multinationals, including Apple, Amazon.com
, McDonald's and Starbucks Corp, are
under investigation or have been sanctioned by the EU executive
for their excessively low tax bills in some EU states.
"We must finish what we have started," Moscovici urged
ministers, according to his speaking notes circulated to the
media. The pace of reforms should remain "fast", he said.
He told states to move "with ambition and determination" to
agree on proposals for a common tax base at EU level that would
put an end to the wide range of corporate tax exemptions and
deductions currently applied by EU countries, and which are
exploited by big companies to lower their tax bills.
He faced opposition from some smaller EU states. On his
arrival to the meeting, Belgian finance minister Johan Van
Overtveldt said Malta was right in stressing that the pace of
reforms should not be "too fast" and that the EU should adapt
its speed to other major economies worldwide.
His remarks were echoed by Luxembourg's finance minister
Pierre Gramegna, who called for a "level playing field in terms
of taxation worldwide".
Moscovici said the EU should lead the world on tax reforms,
especially at a time when the U.S. tax policy is unclear and may
further slow down reforms.
Dutch finance minister Jeroen Dijsselbloem sided with
Moscovici. "Let's not get soft on tax avoidance," he told
reporters on his arrival to the meeting.
(Reporting by Francesco Guarascio; editing by Jason Neely)