EUROPE - Ieke van den Burg, the European Parliament rapporteur for the taxation element of the European directive on occupational pensions, has expressed her disappointment at the European Commission’s lightweight approach to persuading Member States to adopt tax harmonisation for pensions on the EET (exempt, exempt, taxed) basis.

Speaking after today’s presentation by EC Commissioner Frits Bolkestein of his taxation communication to the Parliament’s Economic and Monetary Affairs Committee (EMAC), Dutch MEP, van den Burg, comments:
“ The most important part was the EET discussion and there I am very disappointed.
“ On that point I think the Commission should have come forward with a much stronger proposal.
“ The recommendation that member states should move towards the EET is very prudently stated.”
According to the rapporteur, Bolkestein noted that there had been discussion on the issue since 1998 but that it was a very difficult subject to broach.
“ The parliament, however, has consistently given this issue broad support, both in the Ferri report on the green paper and the Kuckelkorn report last year.
“ In my opinion what they are discussing with member states is more at the level of the officials from the national taxation departments and of course they are not very happy with any changes from Europe."

Van den Burg points out that European leaders reiterated their belief at the recent Stockholm summit that labour mobility was a very important issue, and that there was also a necessity to stimulate capital funding systems for the future, which the Dutch MEP says would seem to support the EET issue.
“ I recognise that some Member States are not in favour of any kind of tax harmonisation but on this point there are other political urgencies.
“ I would expect the Commission to elaborate on how those four members that don’t have the EET system can make the transition.
“ I hope in my report that I can push this somewhat further.

Nevertheless, Van den Burg welcomes Bolkestein’s legal approach to the Communication: “ What he sees about the pensions legal analysis is OK and he recognises that the treaty already gives ground for solving the problems of discriminatory practices of member states in dealing with pensions for posted workers.
“ I think he is right in that.”

She notes that she questioned Bolkestein on the timeframe for his plans, adding: “He said that there were some cases now under way. He mentioned a case in Finland if I remember rightly, and also some preparation for a case in Denmark.
“ This will be under preparation in the Commission and I will probably give an opinion on this.”
“ Somewhere in the beginning of next year they might bring cases to the European court but the hope of course is that Member States will react before this happens.”

On the information exchange portion of the Communication, van den Burg says she asked whether the Commission was proposing use of the existing recovery directive:
“ Bolkestein gave a fairly general answer on this so maybe I will elaborate upon it later,” she says.

Van den Burg replies that there is no timescale yet for the presentation of her report, adding: “I don’t think we even have the official referral yet. But we have linked it more or less to the other directive proposal and said that we will not accept it without the tax element included and make a judgement then.”