The Tax Commissioner Doth Protest Too Much, Methinks

By Global Tax Weekly

To paraphrase Queen Gertrude in Hamlet, the longer and more vehemently a person denies something, the more the listener is inclined to disbelieve them, and methinks that the Tax Commissioner doth protest too much in his insistence that Brussels is not out to harmonize EU corporate tax. Of course, I don’t just mean current incumbent Pierre Moscovici – he’s only been in the job five minutes. A succession of Tax Commissioners, stretching back through the terms of Algirdas Semeta and Laszlo Kovacs, were frequently heard denying that tax harmonization was the Commission’s goal. However, the denials are beginning to look more and more disingenuous in the wake of the revamped CCCTB proposal, which will be mandatory if the Commission gets its way, and the recent agreement by six key EU institutions for greater harmony of fiscal policy and more EU influence over national budgetary decisions. Indeed, Jean-Claude Juncker, President of the European Commission, has almost discarded the pretense that the EU supports national tax sovereignty, and in a recent meeting with members of the European Parliament he said the internal market was incomplete without corporate tax harmonization. The inconvenient – and rather amusing – truth here is that Juncker used to be finance minister of Luxembourg, a country that has become rich partly as a result of competing aggressively in the area of corporate taxation, and which is at the center of the multinational tax ruling storm. Indeed, the Commission President got rather prickly when MEPs kept referring to the “Lux Leaks” affair and suggested they be called “EUleaks” instead, since other member states are involved too. Given that many of these so-called sweetheart tax deals were dished out on Juncker’s watch, some MEPs understandably wanted to know his involvement in the rulings. To which Juncker replied that while he met with large companies on several occasions, he didn’t talk about tax with them. After all, why would a finance minister want to talk about tax?!

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