Twenty-third Report of Session 2013-14 - European Scrutiny Committee Contents


17   Taxation

(34202)

13346/12

COM(12) 465

Amended draft Regulation establishing an action programme for taxation in the European Union for the period 2014-2020 (Fiscalis 2020) and repealing Decision No. 1482/2007/EC

Legal baseArticles 114, 197 and 212 TFEU; co-decision; QMV
DepartmentHM Revenue and Customs
Basis of considerationMinister's letter of 13 November 2013
Previous Committee ReportsHC 86-xiii (2012-13), chapter 12 (17 October 2012), HC 86-xx (2012-13), chapter 12 (21 November 2012), HC 86-xxii (2012-13), chapter 12 (5 December 2012) and HC 86-xxxvii (2012-13), chapter 4 (26 March 2013)
Discussion in Council5 December 2013
Committee's assessmentLegally and politically important
Committee's decisionCleared

Background

17.1  The Fiscalis 2013 Programme is an EU funded programme which is designed to improve the operation of taxation administration systems in the single market, through strengthened administrative cooperation between Member States and candidate countries, their administrations and officials. The programme ends on 31 December. There is a similar programme, the Customs 2013 Programme, for customs activities, which also ends then.

17.2  In 2011 the Commission proposed creation of a successor to the Customs 2013 and Fiscalis 2013 programmes, by merging both into a single successor programme, 'FISCUS', which would run from 2014 to 2020. Following a decision of the Council and the European Parliament that there should be two separate legal instruments, the Commission withdrew its original proposal and replaced it with two amended draft Regulations, of which this is one.

17.3  The draft Regulation is to create a Fiscalis 2020 programme, the purpose of which is to contribute to the Europe 2020 Strategy, by strengthening the functioning of the tax systems within the Member States and the single market. The budget proposed by the Commission for the seven-year period represents an increase of 28% on the Fiscalis 2013 programme.

17.4  During previous consideration of the proposal we heard that satisfactory progress was being made in Council working group negotiation, but:

  • although the Government was trying to secure text to eliminate JHA obligations, it was considering the need for opting in to the proposal; and
  • it had concerns about the use of Article 212 TFEU as a legal base, as it might allow extension of the remit of the programme into new areas.

17.5  In December 2012, we heard that the Government had, as a precautionary measure, opted into the draft Regulation.

17.6  When we last considered the matter, in March, we heard that:

  • negotiations had progressed rapidly on the outstanding issues;
  • the Irish Presidency had tabled a compromise text, which clarified that participation in programme activities would be voluntary, removed the JHA content and sufficiently clarified the scope of the programme, and which the Government believed would protect against the extension of activities further into direct tax matters;
  • on 24 January COREPER had been asked to agree a partial general approach, which did not cover the budget for the programme (this was be determined in the Multiannual Financial Framework (MFF) negotiations) or the use of Article 212 TFEU as a legal base;
  • as the proposal was still under scrutiny the Government had abstained from the COREPER vote in favour of the partial general approach; and
  • the Government welcomed these developments and considered that the proposal formed a good basis for trilogue discussions with the European Parliament.

17.7  We looked forward to hearing of the improvements being secured in the trilogue discussion.[84]

The Minister's letter of 13 November 2013

17.8  The Economic Secretary to Treasury (Nicky Morgan), noting that since we were last updated the Council's Council partial general approach was taken forward to trilogue discussions, tells us that the European Parliament looked favourably on this text, only proposing minor amendments, which are acceptable to the UK and which are also acceptable to the Council and the Commission.

17.9  The Minister tells us, with regard to the first of the two issues that the trilogue discussions did not cover, use of Article 212 TFEU as a legal base, that, in line with Government objectives, the Commission reconsidered the reference to this Article and agreed to its removal.

17.10  On the budget for the programme, the Minister says that:

  • the Lithuanian Presidency has announced that it expects adoption of the MFF within the next few weeks and along with the Commission it is starting to push ahead with files that are on hold, pending the outcome of those negotiations;
  • for Fiscalis 2020, the Commission is proposing a 16% increase to the programme budget to €223 million (£186 million) over seven years — this is a 4.7% reduction from the Commission's original proposal of €234 million (£203 million); and
  • while this latest figure constitutes an increase from the Fiscalis 2013 budget, the Commission must ensure that the overall budget for all its programmes is aligned with the MFF agreement — therefore it is expected there will be increases in some programme budgets and reductions in others.

17.11  The Minister concludes that:

  • despite the increase from the previous Fiscalis budget, the Government has achieved a good outcome for the UK by securing a number of primary negotiating objectives, including clarification of the voluntary nature of the programme, the correct legal base and sufficient clarification of the scope of the programme, which should protect against the extension of activities further into direct tax matters;
  • the Lithuanian Presidency plans to send the proposal to the Justice and Home Affairs Council on 5 December for final approval; and
  • the Government intends to support the proposal.

Conclusion

17.12  We note the improvements secured in negotiation of this draft Regulation and now clear the document.




84   See headnote. Back


 
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