17 Taxation
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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
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| Legal base | Articles 114, 197 and 212 TFEU; co-decision; QMV
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| Department | HM Revenue and Customs
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| Basis of consideration | Minister's letter of 13 November 2013
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| Previous Committee Reports | HC 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)
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| Discussion in Council | 5 December 2013
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared
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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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