Press Release: Economic and Financial Affairs Council, 20 June 2014, Luxembourg

Main results of the Council

The Council agreed an amendment to EU tax rules in order to prevent the double non-taxation of corporate groups deriving from hybrid loan arrangements. This will close a loophole that currently allows corporate groups to exploit mismatches between national tax rules so as to avoid paying taxes on some types of profits distributed within the group. An amending directive will be adopted without further discussion at a forthcoming meeting.

The Council approved draft country-specific recommendations to the member states on their economic and fiscal policies, as well as a specific recommendation for the eurozone as a whole. The texts will be forwarded to the June European Council and adopted in July, under this year's European Semester.

The Council adopted decisions closing excessive deficit procedures for Belgium, the Czech Republic, Denmark, the Netherlands, Austria and Slovakia, thus confirming that they have reduced their deficits below 3% of GDP, the EU's reference value for government deficits.

As a consequence, 11 of the EU's 28 member states now remain subject to the excessive deficit procedure, down from 24 during a 12 month period in 2010-11.

A large number of procedures were opened subsequent to the global financial crisis and recession of 2008 and 2009, and the Council's recommendations under the excessive deficit procedure have set out to support a return by governments to sound fiscal positions.

The Council approved a recommendation in favour of a proposal to allow Lithuania to join the euro area on 1 January 2015. It agreed with the Commission's assessment that Lithuania has achieved a high degree of sustainable convergence and therefore fulfils the necessary conditions for adoption of the euro as its currency. The proposal will be referred to the European Council before a final decision is taken in July.

The Council approved conclusions on:

–implementation of a code of conduct aimed at eliminating situations of harmful tax competition, in the light of a six-monthly report;

– a draft directive on the taxation of energy products;

– a draft directive on the establishment of a standard VAT return with the aim of reducing the administrative burden on SMEs.

ESO: Background information: Eurozone countries in favour of Lithuania euro accession http://www.europeansources.info/record/press-release-eurozone-countries-in-favour-of-lithuania-euro-accession/

ESO: Background information: Council closes excessive deficit procedures for Belgium, Czech Republic, Denmark, Netherlands, Austria and Slovakia http://www.europeansources.info/record/press-release-council-closes-excessive-deficit-procedures-for-belgium-czech-republic-denmark-netherlands-austria-and-slovakia/

ESO: Background information: Council approves recommendations on member states' economic and fiscal policies http://www.europeansources.info/record/press-release-council-approves-recommendations-on-member-states-economic-and-fiscal-policies/

ESO: Background information: Council agrees to close tax loophole for corporate groups http://www.europeansources.info/record/press-release-council-agrees-to-close-tax-loophole-for-corporate-groups/

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