MEPs on Tuesday heard from experts, including Enrico Letta, on how to address the remaining tax-related obstacles and distortions in the Single Market.
The co-existence of 27 different national tax systems in the European Union brings about significant obstacles to cross-border business activity and cross-border workers in the European Single Market. Following up on a study on the topic, the hearing provided an opportunity to discuss the removal of taxation-based obstacles and distortions in the Single Market in order to encourage cross-border investment and activities.
Enrico Letta, former Prime Minister of Italy and now President of the Jacques Delors Institute, mandated by the European Council to prepare by April a high-level report on the future of the EU’s internal market, participated in the hearing to explain the tax-related aspects of his work.
The other invited experts were Christian Kaeser, Head of tax and Corporate at Siemens, Dominika Langemayr, Professor of Economics at the Catholic University of Eichstätt-Ingolstadt, and Jost Heckemeyer, Professor at Kiel University and Research Associate at the Leibniz Center for European Economic Research, Mannheim.
During the debate MEPs focussed their questions on which tax barriers to the Single Market legislators should focus on tackling, on how enforcement could be improved, on the best way to get member states to agree to a significant EU tax reform, and on the need to simplify the rules.
You can watch the hearing again here.
Fighting tax avoidance – The signalling role of FDI data
Later the same day the subcommittee heard from researchers commissioned to undertake a study on good tax practices in the fight against tax avoidance – The signalling role of FDI data. About 40-45% of the global FDI stock is hosted in tax havens, while their share in the world economy is only around 41/2%. These abnormal FDI patterns suggest that FDI and international corporate tax avoidance are closely related. The study was presented by Arjan Lejour.
You can watch the presentation of the study and the ensuing discussion here (scroll to 16:35).