| Author (Person) | Thomson, Ian | |||||||||||||||||||||||||||||||||||||||||||||||||||
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| Publisher | ProQuest Information and Learning | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Title | In Focus | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Details | 8.11.99 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Publication Date | 13/11/1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Content Type | News, Overview, Topic Guide | In Focus | |||||||||||||||||||||||||||||||||||||||||||||||||||
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At the Ecofin Council held in Brussels on 8 November 1999 EU Finance Ministers held a discussion on the state of play of the so-called 'tax package' (code of conduct on business taxation, taxation of savings and elimination of withholding taxes on cross border interest and royalty payments between companies). While the majority of delegations and the Commission expressed their readiness to come to an agreement on the package before the European Council in Helsinki, December 1999, the UK continues to have serious objections to those aspects of the proposals relating to the taxation of savings and the treatment of international bonds. Luxembourg also has objections to aspects of the package. For further details of the Presidency Conclusions summarising the outcome of the discussion at the Ecofin Council see Press Release (Council), PRES/99/328 (8.11.99). For background information on the overall legal basis, objectives and achievements so far of the EU approach to fiscal policy and taxation see the Fact Sheets from the European Parliament. For a summary of the Commission's current overall policy in the area of taxation see SCADPLUS and, in particular, the section dealing with the new global approach to taxation policy launched in April 1996 from which the Commission adopted in October 1997 a Communication (COM (97)495 final) called 'Towards tax coordination in the European Union - a package to tackle harmful tax competition'. This was followed up in a further Communication in November 1997 proposing measures to tackle harmful tax competition in the European Union (COM (97)564 final (the so-called 'tax package' or 'Monti package'), which comprises three separate components:
To follow the progress and current position of the two legislative proposals noted above use the European Parliament's OEIL service: The Legislative Observatory - RSP/1997/2571 and The Legislative Observatory - CNS/1995/0009 As suggested above the main hurdle to agreement to the proposed Directive on the taxation of savings is the UK's fear of the risks to the international bond market in London by the Directive for a range of reasons: financial market uncertainty, loss of competitiveness and reduced financial market innovation. The UK believes that the Directive should not apply to Eurobonds and similar instruments. During negotiations on the proposed Directive earlier in 1999 the UK was asked to produce a paper outlining in detail its point of view and suggesting a way forward to achieve a compromise solution. In response, HM Treasury produced in September 1999 a paper called 'International bonds and the draft Directive on taxation of savings' which put forward two potential approaches for amending the draft Directive to safeguard the competitiveness of EU financial markets. These suggestions were essentially rejected by the other EU Member States at the Ecofin Council on 8 November 1999. The Finnish EU Presidency has promised to continue to work on the dossier to try a solution before the end of December 1999. A Background Briefing from the UK Representation of the European Commission explains the EU policy on tax issues and a further Background Briefing (No.24, 1998) summarises the proposal on the taxation on savings. The Organisation for Economic Co-operation and Development (OECD) maintains a taxation and fiscal affairs page on the web which includes a section on 'Harmful tax practices', including details of a report issued in May 1998 called 'Harmful tax competition'. Further information can be seen in:
Ian Thomson |
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| Subject Categories | Taxation | |||||||||||||||||||||||||||||||||||||||||||||||||||
