European Union

Luxembourg's Pierre Gramegna, chair of Tuesday's meeting, calls the session to order

With the festive season comes all kinds of traditions in Brussels: mulled wine, Saint Nicholas, and another deadline for nations to strike a deal on a financial transactions tax.

But while last year ministers found themselves empty handed when a December deadline for an agreement rolled around, this year it’s different. Sort of.

As Bruxellois bought their sapins de noel (Christmas trees) on the pavement outside the EU summit building, inside another Sapin (Michel), the French finance minister who has been one of the tax’s biggest champions, was full of holiday cheer.

During a meeting of EU finance ministers, Sapin (the minister) hailed a breakthrough moment in the nearly three-year slog for an FTT, which would issue a levy on all stock and a derivative trades in the ten EU countries who are part of the scheme.

Could this Christmas miracle really be true? Could there really be a deal?

In practice, it’s more like half of a deal. Pierre Moscovici, the EU commissioner in charge of tax issues, found a convoluted combination of tenses to sum it up: “We have now the main parameters of what this FTT should be, and hopefully will be.”

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The President of the European Council, Donald Tusk received the letters of credentials of the following Ambassadors:

H. E. Mr Haymandoyal DILLUM, Ambassador, Head of the Mission of the Republic of Mauritius to the European Union
H.E. Mrs Oda Helen SLETNES, Ambassador, Head of the Mission of the Kingdom of Norway to the European Union
H.E. Mr Jawad Khadim Jawad AL-CHLAIHAWI, Ambassador, Head of the Mission of the Republic of Iraq to the European Union

Refugees crossing Greece's border with Macedonia wait to enter a camp earlier this week

The EU’s debate over how to deal with the ongoing refugee crisis has been so full of jargon and euphemisms that in can be nearly impossible for anyone outside the Brussels bubble to know what, exactly, leaders are actually discussing.

Such is the case with a draft communiqué for next week’s EU summit, circulated to national capitals on Monday. The document (which Brussels Blog got its hands on and has posted here) includes seven measures leaders would agree, if the draft is adopted. But all seven may be impossible to understand to those not following every twist and turn in the debate.

As a public service, Brussels Blog hereby offers a translation from eurocrat-ese into English of the migration section of the draft communiqué.

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The establishment of official relations between the Republic of San Marino and the European Community dates back to February 1983. The European Community and San Marino signed an  Agreement on monetary relations in 2000. It entitles San Marino, inter alia to use the Euro as its official currency.

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On Monday 7 December, the European Commission (EC) released its long-term strategy for the European aviation sector. The document touches on many elements including connectivity, competitiveness, safety and security.

The package is wide-ranging, despite the fact that the only legislative proposal contained is a revision of the Regulation on the powers of the European Aviation Safety Agency (EASA). It would in fact seem to be less a “package” of legislative measures, as the Commission had originally announced in December 2014, but rather a ‘roadmap’ for the next ten to fifteen years. This change of direction may be due to the fact that many of the actions needed for the European aviation sector are already under way with the focus being on proper implementation rather than new legislative proposals, especially on the internal market front. Alternatively, the Commission may be using the strategy to set the stage for stronger competitiveness measures in the future, responding to the rising nervousness of EU airlines towards competition from non-EU airlines.

Why does it matter to business?

The strategy does not, on first viewing, put forward concrete proposals to address some of the urgently identified needs from industry. For example, for the cost of infrastructure and the fragmentation national taxes, the Commission only proposes to work on an inventory and does not provide a timeline. The strategy might be described as a collection of good intentions and soft approaches, rather than a legislative hammer to resolve the challenges faced by European aviation. However, there are elements of significant business impact, the most notable perhaps being:

• The strategy brings forward significant proposals regarding external aviation policy, such as relaxing of ownership rules, and defensive measures against perceived unfair competition. These policy shifts will be taken step-by-step, and would seemingly indicate an effort to respond to the particular priorities of certain European airlines.
• The revision of the basic EASA regulation will impact both equipment manufacturers and their airline customers. For manufacturers, the revision should streamline some parts of the airworthiness and certification process, expanding and clarifying EASA’s competencies. However, there are areas of concern: any change to rules on environmental protection could result in stronger rules for aircraft in Europe compared to other regions of the world. For customers, the airlines who need access to certified equipment, it should result in more efficient processes and systems that result in higher safety levels.
• More flexible and proportionate safety rules can give more space to entrepreneurship and recognise the difference between various aviation sectors. In addition, with the shift towards a risk and performance-based approach, both Member State authorities and EASA itself will need to be on top of technological developments. The new regulation will interestingly give the possibility for national authorities to delegate “responsibility on implementation of EU legislation” to EASA on a voluntary basis.
• EASA looks set to acquire competence for the regulation of drones, which will be embedded in a new regulatory framework. This could represent a positive opportunity for the manufacturing sector, especially small and medium enterprises as well as for non-aviation businesses, which may be able to integrate drones in their activities.

What comes next?

• 2015: Council’s decision on mandates to the EC for negotiating bilateral agreements with third-countries.
• 2015: Revision of basic aviation safety regulation N° 216/2008 amending the powers of EASA, including introduction of provisions on drones
• 2016: Revision of Slots Regulation 549/2009
• 2016: Potential non-binding own-initiative report by the European Parliament’s Transport committee
• 2016/7: Evaluation of the Airport Charges Directive 2009/12/EC
• 2017: Evaluation of Groundhandling services Directive 96/67/EC
• 2017: Revision (Implementing act) of the air traffic management network functions, including the selection of the Network Manager
• 2019: Revision of performance scheme (gate-to-gate)

Stakeholders will likely be active in the coming months seeking to engage with the European institutions on potential future initiatives in the framework of the present strategy.

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The Paris climate change agreement should not leave out aviation and shipping, two sectors whose emissions are rocketing and, if left unregulated, could account for up to 40% of all global emissions by 2050, (according to a European Parliament study), said the EP delegation on Tuesday. MEPs also advocate earmarking carbon market revenues as a possible solution for financing climate efforts.
Committee on the Environment, Public Health and Food Safety

Source : © European Union, 2015 - EP

The Paris climate change agreement should not leave out aviation and shipping, two sectors whose emissions are rocketing and, if left unregulated, could account for up to 40% of all global emissions by 2050, (according to a European Parliament study), said the EP delegation on Tuesday. MEPs also advocate earmarking carbon market revenues as a possible solution for financing climate efforts.
Committee on the Environment, Public Health and Food Safety

Source : © European Union, 2015 - EP

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EU Ministers of Finance meet in Brussels on 8 December 2015 to discuss a proposed European deposit insurance scheme, implementation of the banking union, the prevention of terrorist financing, taxation and the European Semester.

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Ever been hit by a computer virus? You are not the only one. More than one million people are affected by cybercrime every day. Cybercrime costs the global economy more than $400 billion (about €368 billion) a year. Find out about the different types of cyber threats out there in our infographic.

Source : © European Union, 2015 - EP

ERRATUM to the report on arms export: implementation of Common Position 2008/944/CFSP
Committee on Foreign Affairs
Bodil Valero

Source : © European Union, 2015 - EP

On 8 December 2015, the Council approved the conclusion of agreements with Liechtenstein and Switzerland aimed at improving tax compliance by private savers. 

The two agreements will contribute to efforts to clamp down on tax evasion, by requiring the EU member states and the two countries to exchange information automatically. 

This will allow their tax administrations improved cross-border access to information on the financial accounts of each other's residents. 

The agreements upgrade 2004 agreements that ensured that Liechtenstein and Switzerland applied measures equivalent to those in an EU directive on the taxation of savings income. The aim is to extend the automatic exchange of information on financial accounts in order to prevent taxpayers from hiding capital representing income or assets for which tax has not been paid. 

The Council also approved the signing of a similar taxation agreement with San Marino, ahead of a signature ceremony later in the day.

The EU-Switzerland agreement was signed on 27 May 2015, and the EU-Liechtenstein agreement on 28 October 2015.

On 8 December 2015, the Council adopted a directive aimed at improving transparency on tax rulings given by member states to companies in specific cases about how taxation will be dealt with. 

The directive is one of a number of initiatives aimed at preventing corporate tax avoidance. 

It will require member states to exchange information automatically on advance cross-border tax rulings, as well as advance pricing arrangements. Member states receiving the information will be able to request further information where appropriate. 

The Commission will be able to develop a secure central directory, where the information exchanged would be stored. The directory will be accessible to all member states and, to the extent that it is required for monitoring the correct implementation of the directive, to the Commission.

A tax ruling is an assurance that a tax authority gives to a taxpayer on how certain aspects of taxation will be dealt with in that specific case. An advance pricing arrangement is a type of tax ruling, issued by a tax authority to determine the method and other relevant details of pricing to be applied to a transfer of goods or services between companies. 

Tax planning

Tax planning by companies has become more elaborate in recent years, developing across jurisdictions. It involves, for example, the shifting of taxable profits towards states with more advantageous tax regimes, or eroding the tax base. 

The directive will ensure that where one member state issues an advance tax ruling or transfer pricing arrangement, any other member state affected is in a position to monitor the situation and the possible impact on its tax revenue. 

International fora 

The directive is in line with developments within the OECD and its work on tax base erosion and profit shifting. G20 leaders approved the outcome of that work at a summit in Antalya on 15 and 16 November 2015. 

Application 

The Council reached political agreement on the directive on 6 October 2015. The European Parliament gave its opinion on 27 October 2015. 

The new rules will be applied from 1 January 2017. In the meantime, existing obligations for member states to exchange information will stay in place. 

Concerning rulings issued before 1 January 2017, the following rules will apply: 

• If advance cross-border rulings and advance pricing arrangements are issued, amended or renewed between 1 January 2012 and 31 December 2013, such communication shall take place under the condition that they are still valid on 1 January 2014.
• If advance cross-border rulings and advance pricing arrangements are issued, amended or renewed between 1 January 2014 and 31 December 2016, such communication shall take place irrespectively of whether they are still valid or not.
• Member states will have the possibility (not an obligation) to exclude from information exchange advance tax rulings and pricing arrangements issued to companies with an annual net turnover of less than €40 million at a group level, if such advance cross-border rulings and advance pricing arrangements were issued, amended or renewed before 1 April 2016.  However, this exemption will not apply to companies conducting mainly financial or investment activities.

Package of measures

The Commission proposed the directive as part of a package of measures in March 2015. The text amends directive 2011/16/EU on administrative cooperation in the field of taxation, which sets out practical arrangements for exchanging information.

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Disclaimer : The interpretation of debates serves to facilitate communication and does not constitute an authentic record of proceedings. Only the original speech or the revised written translation is authentic.
Source : © European Union, 2015 - EP

Transport and energy companies will have to ensure that the digital infrastructure that they use to deliver essential services, such as traffic control or electricity grid management, is robust enough to withstand cyber-attacks, under new rules provisionally agreed by internal market MEPs and the Luxembourg Presidency of the EU Council of Ministers on Monday. Online marketplaces like eBay or Amazon, search engines and clouds will also be required to ensure that their infrastructure is secure.
Committee on the Internal Market and Consumer Protection

Source : © European Union, 2015 - EP

Transport and energy companies will have to ensure that the digital infrastructure that they use to deliver essential services, such as traffic control or electricity grid management, is robust enough to withstand cyber-attacks, under new rules provisionally agreed by internal market MEPs and the Luxembourg Presidency of the EU Council of Ministers on Monday. Online marketplaces like eBay or Amazon, search engines and clouds will also be required to ensure that their infrastructure is secure.
Committee on the Internal Market and Consumer Protection

Source : © European Union, 2015 - EP

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EU Finance Ministers of the eurozone meet in Brussels on 7 December 2015 to discuss further steps on the banking union's single supervisory mechanism, the state of play on Greece and the Ireland post-programme surveillance.

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