AS intervention in ECON 23.09.2015 on the draft INI report of MEPs Dodds-Niedermayer on “Bringing transparency, coordination and convergence to Corporate Tax policies in the Union”

Thank you very much Mr. Chairman, what I would like to just indicate again in this meeting is this, that it is very important to have transparency in tax arrangements and tax policies but with regards to convergence on tax policies between national states and member states, we have to keep in mind one other thing, the situation of peripheral and island regions or states, in terms of how they are going to basically keep a competitive advantage over other countries, over other regions, over other producers. They have accepted to remove barriers, of course free trade, they have accepted state aid rules that are very stringent, they have accepted VAT convergence, they have accepted the budgetary 2 Pack and 6 Pack- programs. The margins for flexibility are really very reduced, especially if they don’t have the endowments that other bigger states have. So we have to keep in mind the fact that tax competition will be needed by these countries unless there is compensatory mechanism to compensate them for the fact that they don’t have the endowments that other countries have, the endowments that the systems have, the advantages the systems have, we have to follow the same discipline and I think this is something that has to be crucially kept in mind all the time, that we need to take account of where competitive disadvantages exist on a systemic basis and the only way, at present by which they can compensate for that is through tax competition. So we have to find some modus vivendi, in this context, that even if convergence is pushed through, moved through, these peripheral island, peripheral countries will still be able to compete in a transparent way across the common market.

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