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On 13th March 2019, the EU institutions reached an agreement on new regulations concerning cross-border company relocations in the EU. In this context, a necessary step has also been taken to combat tax avoidance and to safeguard the co-determination rights of employees.

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Against the background of initiated merger control proceedings by the European Commission and the anticipated sale of the Nidec plant in Fürstenfeld, 400 jobs might be lost. In a personal conversation with Cecilio Madero Villarejo, Deputy Director-General for Antitrust at the European Commission's Competition Directorate-General, AK Steiermark President Josef Pesserl has pressed for preserving the jobs at the Austrian location.

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Each year, the European Commission prepares a Country Report for each Member State within the framework of the European Semester. From the point of view of the Chamber of Labour, the current Report for Austria, which was published on 27 February 2019, includes several critical assessments by the Commission, but also contains a number of aspects, which have been raised by AK for years.

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The BAK welcomes the proposal of the European Commission to turn away from the principle of unanimity in decision-making in EU tax policy and instead to introduce a qualified majority and involvement of the European Parliament.

 

If you have any questions, please do not hesitate to contact us

Frank Ey

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Tax policy is one of the EU’s few policy areas, which for historical reasons, is still characterised by the unanimity principle. Due to this, measures against tax avoidance and tax evasion are regularly blocked by individual Member States. In its Position Paper, the Chamber of Labour supports the proposal of the European Commission to adopt the qualified majority principle in tax issues to drive forward fairer solutions at European level.

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Im November 2018, the European Commission presented its Annual Growth Survey 2019. The Survey is a key component of the European Semester’s Autumn Package, based on which the European Union wants to coordinate the respective economic policies of its Member States. However, from the point of view of the Chamber of Labour, the Annual Growth Survey continues to place too little emphasis on a wealth-oriented economic policy, which benefits all people in the EU.

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In its audit report dated 29th January 2019, the European Court of Auditors voiced far-reaching criticism at the European Fund for Strategic Investment (EFSI), colloquially known as “Juncker-Fund”. Key points of criticism are the exaggerated depiction of the Fund’s leverage effect and its imbalanced geographical distribution of investments. However, the main criticism has been reserved for the fact that about a third of the aided projects would have been realised without the funds of the EFSI, which means that the actual objective of the Fund has not been achieved in these cases.

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As it has done every year, the British NGO Oxfam has published its World Inequality Report on the occasion of the World Economic Forum in Davos. In Europe, the top 10 % hold 37 % of the total European wealth. The Austrian National Bank recently published a similar study for Austria with alarming result: the accumulated wealth of the top 10 % of the population is larger than the wealth of the remaining 90 %.

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Important dossiers concerning European tax policy – from digital tax to Common Consolidated Corporate Tax – cannot be finalised, because the Council of the European Union requires unanimity in tax issues. However, the European Commission has presented a proposal on 15th January 2019 to make qualified majority decisions in Council in regards to tax matters possible from now on.

 

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Following the negotiations in the Economic and Financial Affairs Council (ECOFIN) on 3rd December 2018, which ended with a slimmed down version of the digital tax, the reports on the “significant digital presence” of a company and on the digital tax were put to the vote in the European Parliament. In doing so, an important first step has been taken towards taxing digital giants such as Google, Facebook and Amazon.