European Union’s designated commissioners emphasized on the bloc to be in agreement on a digital tax in case of countries around the globe fail in reaching to a deal to address the matter by the end of next year, a stance that will increase the pressure on multinational companies that are accused of paying a fraction of their profits in taxes globally.
The incoming commissioners, in their written answers to EU lawmakers made public last Friday, also indicated that fiscal regulations and financial reforms for the bloc would be the priorities for them.
Previous efforts of revamping corporate taxation system to better cover the profits made digital multinational companies remained failed to garner desired results because of different tax approaches in different countries.
In case of failing in reaching to an effective agreement by the end of 2020 on a digital tax, the EU should be acting on it by itself alone, , said the incoming commission’s vice-president Margrethe Vestager, who will be in charge of digital policy and competition.
Paolo Gentiloni, taxation commissioner-designate, while repeating the comments of Vestager, said that he would seek to prevent individual EU member countries from exercising a veto to decisions around tax issues. Last year, some of the EU governments have opposed an agreement on imposing a bloc-wide digital tax.
The new commissioners are due to take charge of their offices in November subject to receiving an ok from EU lawmakers in hearing that are scheduled to be held this week.
Gentiloni also said that as part of EU’s efforts to counter tax avoidance and tax evasion, there will be a requirement for authorities in the EU that are part of a tax haven list to get the EU’s common approvals on matters related to taxes, as there is a lack of coordination between EU member countries on financial penalties.