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July 4, 2017

Editor’s letter: When it comes to tax, it’s all about swimming with the elephants

By Vincent Huck

In French politics, an elephant is an influential member of the Labour Party. Pierre Moscovici a member of the French Labour Party since 1984, who served as minister for finance and economy under France’s immediate past president Francois Holland, could arguably fit the label.

Now the EU commissioner for economic and financial affairs, taxation and customs, Moscovici is one of the leading figures of the EU tax reform package.

Besides finance and the economy, what is the link between Moscovici’s national political career and his current position? Elephants, of course.

Because, when it comes to tax, while initiatives are popping up from all sides to put an end to tax evasion and curb tax avoidance, the elephants in the room are numerous. And only a skilful politician can navigate such a minefield.

The EU Commission likes to refer to its tax reform package as an ambitious one. And on paper it is. But will we see the USA on the black list of tax havens that the EU Commission has pledged to publish before the end of the year? Will public country-by-country reporting see the light of the day? Will the triologue for the fifth reform of the EU Anti-Money Laundering Directive bear any results? Will accountants and lawyers be held accountable for tax services offered to their clients?

The questions are endless and the most enjoyable one, for cynics at least, is the one about EU Commission president Jean-Claude Juncker.

Junker was previously prime minister of Luxembourg and his role in the tax sweetheart deals struck with multinationals and exposed by the LuxLeaks has been called into question. To borrow Euractive political editor James Crisp words: are we meant to believe that this is a poacher turned gamekeeper?

Despite the yet to be answered questions and delicate topics avoided in public spaces, it is interesting to note that at least some at the European Union would be happy to take a more direct and confrontational stance. For example MEP Jeppe Kofod who argued in favour of a European FACTA.

Another interesting aspect on the subject of tax, highlighted in these pages and which came out of a tax day event organised by Accountancy Europe at the end of May 2017, is the differences in approach and rhetoric adopted by the Organisation for Economic Co-operation and Development (OECD) and the EU. There are shared goals, but it seems that on paper at least the EU is willing to go further. And reading between the lines one can see each organisation pulling the sheet of legitimacy to its side of the bed.

Hope you enjoy this July issue, solely focusing on tax and the odd elephant.

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