Answer given by Mr Gentiloni on behalf of the European Commission
8.12.2020
1. President von der Leyen has been clear that the Commission should make full use of the provisions in the Treaties that allow taxation proposals to be adopted through the ordinary legislative procedure. The Commission is exploring how to make use of provisions that provide for that procedure, including Article 116 of the Treaty on the Functioning of the EU (TFEU). An initiative under Article 116 TFEU could be used, under certain conditions, to address a distortion of competition in the internal market derived from differences in Member States’ legislations.
2. In July 2020, the Commission put forward a recommendation to Member States to make their financial support to undertakings in the Union conditional to the absence of links between those undertakings and jurisdictions that feature on the Union list of uncooperative jurisdictions for tax purposes.[1] However, the final decision falls within Member States’ competencies, insofar as it is aligned with the Union’s state aid legal framework.
3. Under the Recovery and Resilience Facility (RRF), Member States should address challenges identified in the country-specific recommendations of the European Semester process, unless the Commission has assessed the progress with these recommendations as ‘substantial progress’ or ‘full implementation’. In that context, Member States that received recommendations to fight tax avoidance or evasion[2] should take these into account in their Recovery Resilience Plan as highlighted in the recently issued guidance[3].