Subsidiarity assessment of the Commission's proposal for amendments to the directive regarding simplifications in the area of direct taxation

Mathias Tegnér (S)

Madam Speaker! European cooperation is one of Sweden's greatest assets. Through the single market, we create conditions for trade, investment, growth, and jobs.

European cooperation is, however, based on an important principle: decisions shall be taken at the right level. That which is best decided jointly shall we also decide jointly, but that which is best decided at the national level shall, naturally, be decided nationally. This is the core of the subsidiarity principle. The subsidiarity principle is therefore about decisions being taken at the right level, and that is precisely what this report is about.

Madam Speaker! The European Commission has presented a comprehensive package of proposals to simplify tax rules within the Union, and it is fundamentally a welcome ambition. We need to reduce unnecessary administration, and we need to create clearer rules of the game for companies operating across national borders. We also need to strengthen Europe's competitiveness.

Simplifications must, however, never become an end in themselves, and above all, simplifications must not become a pretext for shifting political power from the member states to the EU. Taxes are not just a matter of administration, but taxes are about how we finance our common welfare. Taxes are about what investments we are to make in our country. Taxes are about how we distribute society's resources, and in that sense, taxes are ultimately about democracy.

Furthermore, Madam Speaker, we know that the innovative power and growth vary greatly in different European countries. It must also not be the case that countries with inherent growth problems do not address them but instead hope that the EU and the EU Commission will solve precisely their problems through supranational solutions. This means, in fact, that one circumvents Swedish autonomy and our degrees of freedom here, and we cannot have that.

Madam Speaker! It is precisely in light of the subsidiarity principle that the Committee on Taxation has reviewed the Commission's proposal. It concerns the volatile subject of regulatory simplifications in the area of direct taxation and is sometimes called Omnibus XI. The proposals in this package are many, and it is difficult to address them collectively.

One of the proposals that is highly questionable from a subsidiarity perspective concerns the introduction of common European minimum rules for tax deductions for research and development. Stimulating research and development is important – there is no doubt about that – but the question is why precisely these tax rules must be harmonized at the European level.

The Commission describes the proposal as a simplification, but in reality, it is about introducing common rules in an area where the Member States have until now been able to decide for themselves. It is a fundamentally important difference. We Social Democrats note that the Commission has not shown why the goals cannot be achieved nationally. Similar objections exist against other parts of the package, where the Member States' room for maneuver is restricted without necessarily justifying why one wants to go that way.

Madam Speaker! Let me be very clear and underline one thing: Safeguarding the national right of taxation does not mean that we Social Democrats are saying no to European tax cooperation – on the contrary. When international companies can move profits across borders, when tax evasion undermines our common resources, and when tax competition risks eroding our tax bases, international cooperation was needed.

There, the Social Democrats have been prepared to go first, and unfortunately, we have sometimes during the last mandate period been forced to push the Tidö government ahead of us. Here we must keep two thoughts in mind at the same time: On one hand, we shall cooperate where cooperation makes us stronger. On the other hand, we must also safeguard the member states' democratic right to design their own tax policy.

For me as a social democrat, this is an important principle. Ultimately, it is about ensuring that Swedish voters will also be able to decide in the future how we finance the school, healthcare, defense, police, and elderly care.

Madam Speaker! I also want to say a few words about the Moderate-led transitional government's handling of this matter, because there is something here that I actually find a bit difficult to understand.

In its fact sheet, the government asserts that the member states' right of taxation must be protected. This is naturally perfectly reasonable; we Social Democrats, of course, share this. The transitional government further notes that the Commission's proposal in certain parts implies harmonization in new areas. I share that assessment. It is simply correct.

What I, just like a unanimous Finance Committee, question is how one can arrive at these conclusions – i.e., that the proposal from the Commission in some parts seems to be something other than pure simplifications and something that instead actually seems to risk complicating the legislation – and despite these objections, land on the conclusion that there is no reason to question the proposal's compatibility with the subsidiarity principle. It becomes strange. I think it is odd, because what is actually the point of the subsidiarity test if we identify clear problems but still choose not to react?

Here, a unanimous Committee on Taxation has gladly drawn a different conclusion than the government. The Committee has conducted an independent review and concluded that parts of the Commission's proposal actually conflict with the principle of subsidiarity. This is good and important, and it also shows why we have a Parliament that shall independently review both the Commission's proposals and the government's assessments.

Madam Speaker! A strong Europe requires both common solutions and respect for the member states' self-determination. Therefore, I completely agree with the Committee on Taxation's conclusion that the Commission's proposal in some parts conflicts with the principle of subsidiarity. A strong Europe needs not only strong common institutions but also independent national parliaments that dare to defend their powers.

Madam Speaker! In conclusion, we Social Democrats therefore say yes to European cooperation when it is needed and reasonable. We say yes to simplifications that actually simplify, and we say yes to joint efforts against international tax evasion.

But we must also dare to say no. We say no when the commission goes further than what is necessary. It is not to be against Europe, but it is to take responsibility for how the European cooperation should function.

With this, I move for approval of the Committee on Taxation's proposal in the report.

(Applause)

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Alexander Svensson (M)

Madam Speaker! I would like to begin by expressing my support for the committee's proposal.

It is not always easy to run a business. Often one encounters different forms of legislation and regulatory frameworks that one must comply with. It concerns everything from the municipalities' exercise of authority regarding building permits to European and national legislation, where some regulatory frameworks are significantly more complex than others. If we are to get more companies and thus more jobs, it must be easy to run a business.

Madam Speaker! We Moderates welcome the ambition that the EU is making to simplify the regulatory burden for companies within the framework of the so-called Omnibus Packages. Fewer administrative burdens and clearer regulations strengthen companies' competitiveness, promote investments, and contribute to growth.

At the same time, there is an important principle that we must safeguard, namely the member states' right to design their own direct taxation. Taxes are not just a technical issue but a fundamental part of every country's economic policy and the financing of the welfare state.

A unanimous tax committee argues that the commission goes too far when it proposes a common minimum level for research and development deductions. This is not about simplifying existing rules, but about harmonizing a new area where the member states have until now had the freedom to design their own solutions.

We are also critical of other parts of the proposal where the member states' room for maneuver is restricted without the Commission having clearly shown that it is necessary to achieve the goal of simplification.

Madam Speaker! Simplification is good. Increased competitiveness is important. But the subsidiarity principle must be respected. Decisions should be made as close to the citizens as possible. The EU should not take over responsibilities that are better managed by the member states themselves.

Therefore, we support the committee's proposal that the Riksdag submits a reasoned opinion that parts of the Commission's proposal are not compatible with the subsidiarity principle.

I vote in favor of the committee's proposal.

(Applause)

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Frida Tånghag (V)

Madam Speaker! I will begin by apologizing for my voice – I was at football this weekend, and we actually won. However, I will keep it brief and not prolong the debate.

The EU's influence on the Swedish tax system is not something we should take lightly, and proposals need to be carefully considered. The committee assesses that parts of what is stated in the proposal regarding simplification of rules in the area of direct taxation should fall within Sweden's own competence. They would also not contribute to any simplifications. Thus, the basic principle should apply, namely that Sweden, in its capacity as a member state, has mandate over its own tax system.

This is the opinion that the committee submits today and which will also be adopted by the Riksdag.

The deliberation was hereby concluded.

(Decisions were made under § 11.)

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