Subsidiarity test of the Commission's proposal for a directive on a common framework for corporate taxation in Europe
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the subsidiarity test of the Commission's proposal for a directive on a common framework for corporate taxation in Europe (Befit). S argues that the tax base should be determined nationally and that the right to levy direct taxes belongs to the Member States 1. S considers the proposal to be far-reaching and to involve a significant restriction of the Member States' powers 1. M emphasizes that tax policy should be part of the national decision-making capacity and that Sweden should design its own regulatory frameworks 2. M considers the proposals difficult to fulfill and that the transfer of decision-making power to the EU is not justified 2. Both parties call for a reasoned opinion 1 2.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Mathias Tegnér (S)
Mr. Speaker! The Committee on Taxation's report number 17, which we are now going to debate, concerns the subsidiarity test of the Commission's proposal for a common framework for corporate taxation in Europe. The proposal for Directive 2023:532 is called in English Business in Europe: Framework for Income Taxation, with the acronym Befit.
This is the third subsidiarity debate and the third subsidiarity objection that the Committee on Taxation has raised in a short period regarding new rules in the tax area from the EU. It is something that we need to discuss.
Before I throw myself into the issue itself, I want to make a small digression. Last night, I had the most unpleasant nightmare. I dreamed that I, here and now, in today's chamber debate, had taken the wrong script and spoke about the wrong subsidiarity test. When I woke up in a cold sweat, the first thing I thought was: "Eh, I would have gotten away with it."
I am not telling this now because I have suddenly decided that the chamber is an appropriate place for small talk about dreams, but because I am afraid that I am right: Had I spoken about the wrong report, I would have gotten away with it. Undoubtedly, the tax committee's eminent clerical staff and experts would have noticed it, perhaps some of the colleagues in the tax committee, and possibly the Speaker, but not so many others. Why is that? Yes, because the EU Commission has submitted several proposals for directives within the tax area.
Even though we Social Democrats share many of the Commission's starting points, we are skeptical about issues regarding direct taxes being handled at the EU level, especially to the extent that is now occurring. Therefore, we have also chosen to debate these subsidiarity tests and our objections, even though the committee has been united in its criticism of the directives.
In another subsidiarity test before Christmas, I tried to introduce a new word into the Swedish language to illustrate the amount of tax directives that the EU Commission is working on right now. The word was "acronym bingo". Almost all of these complicated products have an acronym as a name, so that someone should know what these directives are about: DAC, BEPS, Atad, Faster, Vida and before Christmas Hots. Now it is Befit.
This may sound technical and complicated, but these are important fundamental questions. For us Social Democrats, the starting point for cooperation within the EU is that the tax base shall be determined nationally, that is, that the right to levy direct taxes belongs to the member state. It is an extremely important principle.
The work that the Commission has initiated is fundamentally important, but it is at least equally important that the EU prioritizes correctly. For us Social Democrats, the basic principle is that it is the member states that shall make decisions on direct taxes. This is important and must be protected. For the third time, a unanimous committee unfortunately argues that is not the case. It is a worrying trend.
We Social Democrats are, however, pragmatic. Before Christmas, the Swedish Riksdag, for example, passed the law on supplementary tax. It is fundamentally a question of OECD's second pillar and an important legislative product to create a global minimum level regarding corporate taxes. This cannot be done by a single nation-state alone, and in that case, it is reasonable with EU regulation and OECD frameworks. But that type of regulation must be the exception that confirms the rule, not the other way around.
How do we then think regarding this subsidiarity test? According to the subsidiarity principle, in areas where the Union does not have exclusive competence, it shall act only if the planned action cannot be achieved by the Member States themselves.
Part of the examination is also to weigh the proposal against the principle of proportionality, that is, whether the Union's measures are reasonable to achieve the goals set out in the treaty. In this case, the debate concerns a common framework for corporate taxation for multinational companies.
The Commission already submitted a proposal for a directive on a common consolidated corporate tax base in 2011, which then received the fine acronym CCCTB. Then the proposal was adjusted in 2016 because it was rejected by the member states, and then it was called CCTB. Now, therefore, the Commission's proposal is coming back again in a similar form but with a new name, Befit.
According to the proposal, a common tax base shall be calculated for the companies in a group affected by the Befit framework. In short, this means that corporate taxation will be largely harmonized for large companies in Europe.
We Social Democrats believe, in line with a unanimous tax committee, that the proposal is far-reaching and entails a major restriction of the member states' powers regarding direct taxation. We believe that it is now reasonable to follow the implementation of OECD's second pillar, which I mentioned earlier, in the form of the law on supplementary tax, instead of hanging new regulatory frameworks on a law that is not tested and where we do not know what the effects will be of creating new regulatory frameworks that are hung on other new regulatory frameworks. This is the fundamental problem here today.
We mean that it is not certain that the benefit of harmonized tax rules in this area outweighs the restriction of Sweden's and other Member States' ability to govern our own national tax rules. Therefore, we have a subsidiarity objection in this matter.
In conclusion, Mr. Speaker, I want to give a stinging rebuke to the Tidö parties and the government. In a time when the EU Commission is working towards a fairly large harmonization within the tax area, it is even more important that Sweden speaks with a common voice. Unfortunately, we have seen a shift in this issue, which I have mentioned earlier here in the chamber. This shift concerns how the government views the anchoring of EU tax issues.
Throughout the entire 2000s, governments from left to right have secured a broad, cross-bloc majority in these issues. It has been good for Sweden. Unfortunately, the Tidö Agreement appears to put a spoke in the wheel of that type of broad and proactive anchoring, which has occurred both in Sweden's Riksdag and between leading major parties here in Sweden. We Social Democrats regret this.
It is obvious to most that Moderates and Social Democrats, for example, have different views on Swedish tax policy, but we believe that this should be debated here in the Swedish Riksdag and not handled at the EU level. Historically, we have had the same view on what constitutes EU issues specifically within the tax area. It is not good for Sweden if this consensus is broken.
My view is that the Commission's proposal regarding Befit has come to us for reasonable reasons. The Commission wants to both simplify for companies and prevent tax crimes. It is fundamentally good. We are positive about these ambitions, but we believe that this is not the right way to go. A unanimous committee believes that this is national competence, and that implies a responsibility for us here in the Swedish Riksdag. Regarding these two groups of issues, the Committee on Enterprise works with rule simplification for companies while the Committee on Taxation works with tax issues.
We Social Democrats are pleased that the SD government has joined the previous S-led government's goals for regulatory simplification. It is good, but it is important that the SD government fights tax evasion and tax avoidance with the same frenzy as the previous Social Democratic government. If we seriously mean that this is national competence, we need to do the work here in Sweden. I mean that the current government has more to deliver in that area.
If we want a society that holds together, then right must be right. Then companies that do well nationally and globally must also pay reasonable taxes. I do not know if you are aware of this, but according to the OECD, one-third of total global corporate profits are taxed at less than 15 percent.
Furthermore, which is noteworthy, over half of the profits taxed at under 15 percent belong to companies that have their headquarters in high-tax jurisdictions, for example within the EU. This indicates that even large European companies have an effective tax rate of under 15 percent. For me, this indicates that there is a need for increased work against advanced tax planning and tax evasion. This should primarily be carried out by the government and here in the Swedish Riksdag, not by the EU Commission, as these are issues that are possible to drive from here in Sweden.
Mr. Speaker! It is important, it is right and it is necessary with a powerful effort against tax evasion and tax avoidance. Therefore, I move for approval of the proposal in the Committee on Taxation's report 17 and thereby also to the committee's reasoned opinion.
Fredrik Ahlstedt (M)
Mr. Speaker! International companies are very important for growth and development throughout the EU and not least in Sweden. Swedish companies are of great importance for the Swedish economy and Swedish growth. It is important that we now stand up for our Swedish companies and for the opportunity for our companies to compete in the internal market as well as in the rest of the market.
Swedish companies have a high reputation within the European Union and are world leaders in many areas. They are known for their precision and high quality of the services and products produced. Swedish companies are also far ahead when it comes to the green transition and sustainability ambitions, and distinguish themselves particularly when it comes to reducing carbon emissions. Many Swedish companies also work on strengthening the social dimension and ensuring good working conditions for their employees.
Competitiveness for Sweden and the rest of Europe is, of course, in many ways crucial for us to succeed in increasing growth. Sweden has had a deplorable development over the last eight to ten years when it comes to economic growth, and there Sweden really must sharpen up and become better.
Mr. Speaker! We Moderates consider it important and necessary to improve the functioning of the internal market, particularly regarding simplified administration and regulatory simplifications for companies. The proposal we are debating today is part of the justification for being able to carry it out.
We Moderates, however, want to emphasize that we believe tax policy should continue to be a part of the national decision-making. The taxes needed to finance national commitments are best decided closer to the citizens in the respective country, where the prioritization between different activities and the trade-off regarding which taxes should be levied can be made.
Corporate taxation is often an important part of a country's economic and political conditions and the balance between different parts. Sweden should therefore design its own regulations and itself decide how corporate taxation shall be designed.
In this case, the Commission has an ambitious agenda and argues for its proposal by highlighting various parts that could be improved with the proposal. The Commission wants, among other things, to counter tax evasion and tax avoidance, and this is naturally good. There are also proposals for a one-stop-shop for companies to make it easier for them to submit declarations, which can then be submitted in a single place.
The proposals can probably be considered difficult to fulfill and implement, and therefore we cannot stand behind them. We also do not consider that the trade-off regarding moving decision-making power to the European Union justifies that part. Therefore, we consider, just like the committee otherwise, that we shall submit a reasoned opinion.
Therefore, Mr. Speaker, I vote in favor of the committee's proposal.
The deliberation was hereby concluded.
(Decisions were made under § 11.)
Subsidiarity test of the Commission's proposal for a directive on a common framework for corporate taxation in Europe
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.