In July 2025, I had the chance to interview Dr. Irma Mosquera Valderrama, Full Professor of Tax Governance at Leiden Legislation Faculty (Leiden College) and EU Jean Monnet Chair Holder on EU Tax Governance. Since September 2024, she has additionally been one of many representatives on behalf of the European Affiliation of Tax Legislation Professors on the EU Platform for Tax Good Governance. Dr. Irma Mosquera Valderrama offers her educational (private) views on the way forward for the EU tax combine. A evenly edited transcript from that interview is under. In her view, the EU’s lack of a transparent and coherent path in taxation reveals the failure of the EU to generate legitimacy and belief amongst EU residents, EU international locations, and third, non-EU international locations, along with the failure to extend the competitiveness of the EU within the world financial system.
Sean Bray: How would you characterize the EU tax combine?
Irma Mosquera Valderrama: From my perspective, and after I see extra of what’s occurring now within the EU and within the final couple of years for the reason that 2008 monetary disaster, with all of the dialogue on BEPS (base erosion and revenue shiftingRevenue shifting is when multinational corporations cut back their tax burden by shifting the situation of their earnings from high-tax international locations to low-tax jurisdictions and tax havens.), honest taxation, extremely digitalized enterprise, taxation of wealth, and Pillar Two, I discover it just a little complicated.
It isn’t clear what the path of the EU is. Within the Nineties, it was once just a little extra about enterprise taxation—as an example, how we guarantee that the EU will likely be enticing for companies (small, medium enterprises, and multinationals). Because the worldwide tax developments launched after the 2008 monetary disaster, the EU and EU establishments have modified their path to observe these worldwide tax developments. The result’s initiatives to advertise the trade of data and administrative cooperation amongst tax administrations, to deal with aggressive tax planning by multinationals (together with the introduction of the BEPS Venture and the EU Anti-Tax Avoidance Directives), to realize honest taxation worldwide by introducing the EU checklist of non-cooperative jurisdictions, and to deal with undesired tax competitors by introducing the Pillar Two Directive, amongst others.
We even have a 2021 proposal with the UNSHELL Directive. After a number of technical discussions, compromise texts and notes, and re-drafting, the EU Council concluded in Could 2025 that this proposal shouldn’t be continued, primarily attributable to substantial overlaps between this proposal and the Directive in Administrative Cooperation DAC 6. So, in my opinion, there are loads of initiatives however no clear path for what the EU tax coverage is.
As an illustration, in EU discussions, they are saying we have to have wealth taxation. We have to have a company earnings taxA company earnings tax (CIT) is levied by federal and state governments on enterprise earnings. Many corporations aren’t topic to the CIT as a result of they’re taxed as pass-through companies, with earnings reportable beneath the person earnings tax.. We have to obtain honest taxation. We have to obtain the simplification of tax guidelines and laws. We have to cope with the multinational enterprises and the small and medium-sized enterprises, however how are we going to do all of that? It’s a bundle that lacks just a little little bit of clear path.
Sean Bray: What enhancements do you assume have to be made within the medium time period for a wholesome, steady fiscal place?
Irma Mosquera Valderrama: I believe it could be vital to nonetheless take into consideration what occurs after COVID. What are the implications for enterprise, for enterprises? What’s being finished now? As a result of there was a second of urgency, and we overlook that COVID occurred lower than 4 years in the past.
On the identical time, it’s not clear how the EU is coping with present challenges, reminiscent of local weather change and EU competitiveness. One of many issues with the present EU initiatives, such because the Carbon Border Adjustment Mechanism (CBAM) and the Pillar Two Directive, is that these proposals could end in completely different outcomes than have been initially supposed. As an illustration, CBAM desires to encourage cleaner industrial manufacturing in EU international locations and cut back carbon emissions. Nevertheless, non-EU international locations are additionally taking their very own measures to reply to CBAM. As well as, CBAM doesn’t take into account the completely different ranges of improvement of nations and their makes an attempt at decarbonization. Moreover, the EU ought to take into account the right way to cut back carbon emissions from knowledge facilities as a result of progress of AI and digital transformation, which isn’t addressed by CBAM. Subsequently, in my opinion, the strategy to carbon emissions shouldn’t be one-sided from the EU in direction of non-EU international locations, however holistic and complete to scale back carbon emissions in all sectors, in addition to to realize environmental sustainability.
One other instance that’s at the moment being mentioned is the implications of the brand new side-by-side system of the Pillar Two Directive as a result of United States’ response to the Pillar Two Directive, which has additionally been acknowledged by G7 international locations. This new improvement could render this directive ineffective in coping with tax competitors. Because of these developments, Germany has just lately questioned the usefulness of the Pillar Two Directive.
The present work of the EU Fee on tax simplification of EU guidelines and laws doesn’t tackle these issues above, and due to this fact, a extra holistic strategy linking tax, sustainability, and geopolitical developments is required. It could be a matter of legitimacy. And perhaps a matter of being clear and being open or accountable. These are additionally problems with governance that have to be taken under consideration by the EU. I consider the spending aspect: I see loads of issues proper now for residents and companies believing and understanding what the European Union is doing, and what the European Fee is doing, and the way that is linked to enhancing EU enterprise competitiveness.
There are a lot of examples that present the shortage of coherence and holistic strategy in direction of EU objectives, and that is likely one of the issues within the EU. In elevating income, but in addition on the spending aspect, what are we doing? I simply really feel like in case you are European and you’re within the European Union, now it’s very troublesome to really feel like Europe is admittedly serving to all Europeans. Along with that, we even have the EU commonplace of tax good governance that offers with non-European international locations. Non-EU international locations, together with small island growing states, are asking why we have to do that. What’s in it for me? It looks as if these requirements present the carrot and stick strategy, so both you adjust to the EU standards talked about within the commerce and financial partnership agreements, or you’re talked about on the checklist, which ends up in EU support being suspended, amongst different penalties. One other downside is that solely non-EU international locations are talked about on this checklist, which doesn’t make this commonplace reliable for these international locations.
These issues have additionally been addressed prior to now in a single article the place I analyzed the challenges of EU direct taxation within the 2020s and the change of path in EU taxation for the reason that 2008 monetary disaster. To research this alteration of path, I exploit the analogy of a Darrieus turbine. I argue on this article that direct taxation within the EU is sort of a Darrieus turbine: comparatively good effectivity, however it reveals poor reliability, because it will depend on exterior energy to begin, and it tends to be fatigue-prone as a result of extensive variation in utilized forces throughout every rotation. The primary cause for this analogy was that the instruments to handle this alteration in wind path are much like a Darrieus turbine, which generates electrical energy, however it has failures in its design that make this turbine unreliable. As within the Darrieus turbine, the EU is going through obstacles concerning what makes the adjustments within the EU prone to excessive wind situations. There are additionally difficulties in beginning up, which rely upon exterior forces, leading to poor reliability and a bent to be fatigue-prone as a result of extensive variation in utilized forces throughout every rotation.
The primary aspect is that, typically, this turbine—like direct taxation—has a comparatively good effectivity. As an illustration, that is the case for introducing the Anti-Tax Avoidance Directive (ATAD 1 and a couple of) and the adjustments to the Directive in Administrative Cooperation. These devices are relevant not solely to EU international locations, but in addition to 3rd, non-EU international locations. As within the Darrieus turbine, nevertheless, direct taxation isn’t protected against excessive wind situations. The wind situations in direct taxation are determined by the OECD, G20, and international locations reminiscent of China, India, and the USA, that are very lively in these organizations. These wind situations additionally lack coordination. For instance, within the taxation of extremely digitalized companies, there are a number of multilateral (Pillar One, UN First Protocol to the Framework Conference) and in addition unilateral initiatives (digital service tax, and many others.), which create issues for the self-starting of those initiatives inside the EU and on the worldwide stage. As an illustration, the implementation of those guidelines and the commerce retaliations from the USA for international locations with a digital service tax is an instance of the problem.
The second aspect is the introduction of the EU Customary of Good Tax Governance, together with the checklist of non-cooperative jurisdictions, which has proven the poor reliability of those initiatives as a result of civil society and the EU Parliament are questioning EU international locations’ compliance with the checklist of non-cooperative jurisdictions. Third, non-EU international locations are additionally questioning the usefulness of the usual of honest taxation within the EU primarily based on the Code of Conduct of Enterprise Taxation, which isn’t enforceable inside the EU by its personal nature. This reality requires additional evaluation concerning the worth of this Code of Conduct and on the necessity for adjustments to this course of on black-listing and negotiations of the Customary by the EU vis-à-vis third, non-EU international locations.
The issues within the design of the Darrieus turbine make this turbine prone to being fatigue-prone as a result of extensive variation in utilized forces throughout every rotation. This fatigue can lead to cracks at stress ranges that may result in failure, harm, or the destruction of this turbine. Within the EU, the completely different proposals and adjustments to those proposals present the extensive variation in utilized forces and that there are cracks in these initiatives. A newer instance is the place of Germany concerning the Pillar Two Directive and the place of the EU concerning the work carried out by the UN, together with the usefulness of the UN Framework Conference and its two protocols.
These issues and issues from EU international locations ought to be addressed, or the outcome may very well be failure of the EU initiatives as a result of international locations won’t commit to those initiatives. Some third, non-EU international locations could determine to conform on paper with these initiatives, leading to mock compliance as a result of the adjustments won’t be enforced in observe. Subsequently, I really useful in 2020 that the EU establishments and EU international locations consider which adjustments are wanted to offer a stability between the necessity for competitiveness and producing legitimacy and belief for international locations and taxpayers. This suggestion remains to be relevant to the EU, and much more vital right this moment, in gentle of the brand new developments in the USA, the brand new function of the United Nations in tax cooperation, and the present developments following the adoption of the EU Inexperienced Deal.
Sean Bray: What impact has the BEPS Venture had on worldwide tax competitors? What results might come about inside the EU attributable to Pillar Two implementation?
Irma Mosquera Valderrama: I make a distinction between BEPS and tax competitors as a result of, in precept, BEPS was in regards to the earnings, revenue shifting, base erosion—and was not coping with tax competitors points per se. And that’s one of many issues that we’ve, as a result of solely what’s dangerous tax competitors will likely be included within the BEPS in Motion 5.
We see that loads of international locations at the moment are introducing these minimal requirements on BEPS in additional than 145 jurisdictions. We’re speaking about multilateral devices. But when we see what occurs in BEPS from the second they began with the mission in 2013, and in 2015, with the BEPS inclusive framework, we see that there are issues of legitimacy and inclusiveness for growing international locations, because it has been highlighted by international locations, regional tax organizations (e.g., ATAF), civil society, and scholarship. The result’s the dialogue initiated in 2022 with a UN Common Meeting Decision on the promotion of inclusive and efficient worldwide tax cooperation on the United Nations. Following this decision, the Phrases of Reference for a UN Framework Conference to realize a totally inclusive and simpler worldwide tax cooperation have been drafted and adopted by the 2024 UN Common Meeting Decision. Along with this Framework Conference, two protocols will likely be drafted: protocol 1 on the taxation of earnings derived from the supply of cross-border providers in an more and more digitalized and globalized financial system, and protocol 2 on the prevention and backbone of tax disputes. The textual content of this Framework Conference and two protocols is at the moment beneath dialogue on the UN Intergovernmental Negotiating Committee in a Member State-led course of from 2025 to 2027.
However then the query is, will the BEPS Inclusive Framework, the UN Framework Conference, and its two protocols achieve success in attaining inclusive and efficient tax cooperation? I believe that BEPS helped international locations and tax advisors change their mindset just a little. So, it was not solely about elevating income or attracting funding, but in addition about tackling base erosion and revenue shifting by multinationals. Nevertheless, there may be nonetheless loads of work to be finished for the BEPS Inclusive Framework to be efficient in tackling aggressive tax planning. As I’ve addressed prior to now within the framework of the GLOBTAXGOV Analysis mission, there are enter (participation, illustration within the decision-making course of) and output legitimacy (final result efficient to deal with aggressive tax planning and obtain the sustainable improvement objectives) deficits of the BEPS Inclusive Framework, regardless of the variety of international locations committing to this BEPS Inclusive Framework. The dearth of enter legitimacy was additionally acknowledged by the OECD, ensuing within the creation of a co-chair (from a growing nation) of the BEPS Inclusive Framework.
Moreover, in one other article, I investigated the introduction of the BEPS 4 Minimal Requirements and its peer evaluate course of in seven international locations collaborating within the BEPS Inclusive Framework, concluding that “there may be throughput legitimacy deficits (i.e., lack of transparency, openness, inclusiveness) within the peer evaluate course of and that they need to be addressed by the OECD and international locations collaborating within the BEPS Inclusive Framework.” In some circumstances, there was no readability about whether or not and the way the BEPS 4 Minimal Requirements have been carried out, and in some circumstances, there have been delays of their implementation with none cause. Subsequently, I really useful that the OECD Secretariat and the BEPS Inclusive Framework enhance the governance of the peer evaluate course of. This may very well be finished by making certain that the method has extra accountability, transparency, and inclusivity, and is open to all stakeholders.
The dialogue of the legitimacy of the OECD vis-à-vis non-OECD international locations, together with growing international locations, has resulted within the present course of on the UN Framework and its two present (beneath dialogue) protocols.
The issue that we do have is that now we are saying, effectively, if we’re coping with this, then let’s cope with one thing else. And the one thing else is tax competitors. And in my opinion, tax competitors with Pillar Two, by the EU adopting the Directive on Pillar Two, and having different massive international locations that aren’t going to do it or could not do it, then the EU is limiting itself. To this, there’s a query of legitimacy about the way in which Pillar Two was adopted. I keep in mind two years in the past, an EU official mentioned, effectively, if we don’t get a unanimous settlement on the EU Directive for Pillar Two, we’ll make use of the adoption of this directive by means of enhanced cooperation. At the moment, Hungary and Poland have been vetoing the adoption of this directive. However thereafter, we acquired an settlement with Hungary and Poland having other forms of retribution (the EU acknowledged these international locations’ compliance with the rule of regulation and launched the COVID support, and so forth). This example additionally reveals the shortage of legitimacy contemplating that this directive got here into place.
However so long as we would not have, as an example, the USA adopting Pillar Two, we could not have any success on this. Time has proven that the USA has been profitable in creating its side-by-side system subsequent to the OECD Pillar Two and the EU Directive. And, on the identical time, you see that European international locations and non-European international locations, together with growing international locations, are battling the complexity of the Pillar Two guidelines, and the appliance of the QDMTT, UTRP, and STR guidelines, amongst others.
However the query is how international locations, together with EU international locations and growing international locations, can nonetheless appeal to funding by having a minimal (15 p.c) tax fee. If the supply nation doesn’t introduce the 15 p.c rule, the nation the place the multinational is situated (residence) will do it. However is that this honest if the multinationals are primarily situated in developed international locations? Will the developed international locations switch a few of their taxes to the growing international locations?
So, with this type of dialogue on the minimal tax fee, it’s troublesome to deal with the true downside, which is the function of tax incentives, and whether or not tax incentives are nonetheless vital to draw overseas direct funding and to boost competitiveness. I discover it troublesome as a result of the tax fee diverts consideration from international locations to debate what makes a superb tax incentive, and to correctly take into consideration what kind of incentives are wanted, how transparency of tax incentives might be enhanced by together with tax expenditureTax expenditures are departures from a “regular” tax code that decrease the tax burden of people or companies by means of an exemption, deduction, credit score, or preferential fee. Nevertheless, defining which tax expenditures grant particular advantages to sure teams of individuals or kinds of financial exercise isn’t at all times easy. stories, and so forth. So, it takes just a little bit of dialogue as a result of when you go to international locations and also you begin speaking about tax incentives and what must be finished, the one factor authorities officers are apprehensive about is the right way to implement Pillar Two as a result of that’s what they’re being pressured now to consider. So, in my opinion, there may be nonetheless loads of work to be finished, and that’s one of many explanation why we’re having the present negotiations for a UN Framework Conference and its two protocols, as a result of the international locations aren’t pleased with the way in which that worldwide tax cooperation is happening. However it’s unclear is the UN will have the ability to remedy the underlying issues. As a result of that’s additionally one other downside. You see how troublesome it’s generally to achieve an settlement. Time will inform, for the reason that UN course of simply began, and it’s anticipated to finish by 2027.
Sean Bray: What ought to the EU’s function in the way forward for worldwide tax system policymaking be? How will this function have an effect on home tax coverage in the long term?
Irma Mosquera Valderrama: I believe internally the EU nonetheless has the issue of unanimity, and in addition that in direct taxation, the foundations are launched by means of a directive that must be transposed into nationwide laws. So, in that sense, all initiatives that the EU goes to take when it comes to direct taxation will likely be restricted by these two options. And that signifies that you’ll have to negotiate with the international locations for unanimity. And on the identical time, the directive offers extra energy to the opposite international locations to do extra as a result of with the directives, you are able to do extra, however you can not do much less.
One superb instance was when the EU carried out DAC 6, following BEPS motion 12 (disclosure of aggressive tax planning preparations). As a result of it was very troublesome to outline what a reportable tax association was. And due to this fact, there have been loads of uncertainties concerning what reportable tax association the tax middleman could or could not notify. The result’s extra uncertainty for enterprise, intermediaries, and tax administration typically.
Now, with Pillar Two, we do have some guidelines. The EU says we don’t wish to deviate a lot from the OECD. I do imagine, due to these limitations, the EU will say, effectively, if it comes from the OECD, then we, the international locations, are already members of the OECD, so due to this fact we are able to implement it simply. However then I believe that there’s a lot of strain additionally, as an example, within the function of the EU Parliament and its FISC subcommittee saying we have to be extra clear. So, there’s a political situation there, to be extra clear. We have to deal with tax havens, together with some European international locations as tax havens.
So, this additionally brings extra politics to the tax discussions as a result of the truth that the EU Fee should go there and clarify, “really, what we imply is that this and this,” to the EU Parliament and its FISC subcommittee. Typically there are discussions which can be parallel: one on the EU Fee stage, and one other one (public hearings) on the EU Parliament FISC subcommittee stage. If one instance can illustrate this, it’s the 2021 EU Parliament decision to reform the EU checklist of tax havens to incorporate EU international locations. On this decision, the EU Parliament highlights the shortage of transparency of the EU itemizing course of, and requires a formalization of the function of the Parliament in relation to the Code of Conduct Group, “together with with regard to governance and the standards of the itemizing course of, reminiscent of by means of an opinion-giving course of.” In one other 2022 decision addressing the taxation of extremely digitalized companies (Pillar One), the EU Parliament urged the Fee to revisit the prospect of unilateral motion (digital service tax) in case of no settlement being reached on Pillar One by 2023. Till now, the EU Fee has not adopted this suggestion.
One other instance of various approaches, completely different audio system, and completely different outcomes is the current public hearings on Pillar Two and decluttering organized by the EU FISC subcommittee. These discussions are additionally being addressed on the EU Platform for Tax Good Governance (September/December 2024 and March 2025). Moreover, if we see what the function of the EU with respect to the UN framework and the dialogue on the UN is, I discovered that it’s now very passive as a result of, in precept, for those who observe the discussions from the UN, the EU international locations have been opposing it. Thereafter, the EU abstained when voting on the UN Phrases of Reference for a Framework Conference, and at the moment it participates within the intergovernmental negotiations, however nonetheless with some reservations. Subsequently, it’s not actually clear what the EU international locations and the EU Fee are doing. So, they simply did one thing as a result of they wanted to do it. However the query is, will the EU be an vital participant in these UN developments? I don’t assume so.
I believe extra will likely be in regards to the international locations. Some international locations which can be already very lively on the UN Tax Committee—as an example, the Netherlands—take part of their nationwide capability, however these international locations could also be extra attention-grabbing or extra useful or extra helpful in these discussions. Additionally, different non-EU international locations, reminiscent of international locations from the African Group, India, and China, amongst others could also be extra lively. America determined in February 2025 to go away the intergovernmental negotiations and invited different international locations to observe its lead. In my opinion, with the UN focusing extra on protocol 1 and a couple of (workstreams II and III) fairly than on the textual content of the Framework Conference (workstream I) which is principally (as of July 2025) focusing extra on the (substantial) commitments for the protocols, the international locations in these UN intergovernmental negotiations will miss the chance to develop a governance framework to make sure legitimacy, garner inclusive and efficient participation, and improve capability constructing. Peter Hongler and I’ve addressed these in our feedback to the session on UN workstream I.
So, you want loads of negotiators and an understanding of what this UN Framework Conference and its protocols will appear to be. You want folks with completely different experience and that is what a rustic just like the Netherlands, as an example, can present as their staffers have loads of expertise in funding treaties, tax treaties, and worldwide negotiation. Nevertheless, within the EU, the concept is extra to assist with capability improvement—as an example, by contributing to the Addis Tax Initiative—however the EU might do greater than that, by providing assist and technical experience to growing international locations to take part in these UN intergovernmental negotiations. So, it’s not a matter of abstaining, or simply being current however with none dedication. EU establishments and EU international locations will help different international locations, however this requires extra engagement within the UN intergovernmental negotiations.
So, the EU dedication ought to be world, and never solely with support, however with assist in negotiations. Since 2024, there was a brand new mandate for the EU Platform for Tax Good Governance, however how will this Platform additionally assist growing international locations? Particularly contemplating that the UN Framework Conference and its two protocols will likely be developed, will likely be made, will likely be written by some means.
I’m very curious what will be the function now of the EU, the EU Fee, and the EU Platform of Tax Good Governance. To my data, till now, it’s not that sturdy. It’s extra the US, as an example, or India, or China. However the EU has not been so profitable as such, as a supranational entity. One instance that additionally reveals that is the dissatisfaction of some EU international locations with the brand new (July 2025) US-EU commerce deal.
Sean Bray: What do you assume would make the way forward for the EU tax combine fairer internally and externally?
Irma Mosquera Valderrama: Really, that’s an excellent query as a result of within the final two years we wrote an article on tax equity, and we have to focus on equity for BEPS and growing international locations. Earlier than discussing the equity of BEPS, we have to outline equity first. And we look at it from a philosophical, financial, authorized perspective, and so forth. Extra just lately, each time I’m discussing worldwide tax, both right here within the Netherlands or some place else at a convention or instructing in a foreign country, it turns into a difficulty of equity.
Within the EU tax combine, Tax Basis says effectivity over equity. However I’ve the sensation that every one the discussions we’re having are about equity. If you come again to Pillar Two, it’s about equity. If you speak about BEPS implementation and the BEPS evaluate, it’s about equity. And I discover that each time equity turns into extra of the underlying idea that nobody defines however everybody has to contemplate, and we don’t know what we have to do with it. So, for me, the EU must be very clear about what equity is and what it desires to realize.
Since you say, as an example, we would like a aggressive, sustainable, and honest tax system, however what does that imply? And the EU is excellent at utilizing phrases just like the OECD that generally would not have any which means. So, when it comes to equity, I believe that there’s that underlying idea, and we have to have in mind that many of the dialogue we’re having proper now’s about equity with out even figuring out what that’s, after which it’s not in regards to the technicalities, it’s not about the way you cope with the participation exemption, as an example, or the way you cope with the double taxationDouble taxation is when taxes are paid twice on the identical greenback of earnings, no matter whether or not that’s company or particular person earnings. as such, as a result of it’s resident sourced, however it’s in regards to the equity, the way you distribute the income pretty. So, it’s not in regards to the precept itself. The precept is a measure to distribute pretty. However what does it imply? So then, in that sense, equity remains to be crucial.
Sean Bray: How ought to the EU make tax coverage extra reliable within the lens of enter, output, and throughput legitimacy?
Irma Mosquera Valderrama: I’ve been working quite a bit with enter, output, and throughput legitimacy. And the reason being that after we take a look at the validity of worldwide requirements, both by the OECD or by the EU, it is advisable to take a look at the validity when it comes to what. And I believed it could be legitimacy. And you then take a look at the BEPS Venture, but in addition you take a look at the EU commonplace of tax good governance. The query is to what extent did the international locations take part and have been represented on this and the EU commonplace? It’s possible you’ll say, effectively, really, the clear trade of data and BEPS have been determined by the OECD, so the EU simply took it. However the situation of honest taxation inside the EU is one idea that has been developed by the EU.
And it began with the Enterprise Code of Conduct. After which after you see that each time we speak about honest tax competitors, honest taxation, honest taxes, however we don’t know what it means. Nevertheless, the EU is utilizing this idea of honest taxation to create a listing of non-cooperative jurisdictions. So, the query is to what extent this honest taxation actually has enter and output legitimacy. In case you say the output is sweet for you as a result of it lets you obtain the sustainable improvement objectives for international locations, the output is sweet for you as a result of, as an example, in case you have the EU commonplace of tax good governance, you may elevate extra income and obtain the 2030 Sustainable Improvement Agenda, and in addition the nation can profit from the commerce and/or financial partnership settlement and EU improvement support. Nevertheless, it’s not clear whether or not international locations can actually profit from these agreements or support, and if maybe the answer of introducing BEPS, honest taxation, and transparency could end in extra work for the tax administration, in addition to the issues concerning the legitimacy of the EU checklist of non-cooperative jurisdictions, which is at the moment solely relevant to non-EU international locations. Curiously, within the February UN intergovernmental session on the UN Framework Conference, some small islands additionally addressed the legitimacy of the checklist of non-cooperative jurisdictions, and their impact on these islands which have restricted assets and capability to implement all these adjustments which can be required by the EU.
We discuss in regards to the equity of the tax system, the modernization of tax programs, public finance, and all this, however we don’t know what to do with it. So, when it comes to output, it’s not clear whether or not these requirements, both by the EU or by the OECD, even imported or exported, are actually good for the growing international locations. And one factor that we overlook, and that I believe that the EU, growing international locations, and EU international locations want to deal with, is coverage coherence. As a result of for those who take a look at it, the EU says this can be a coverage coherence for improvement. And we’ve some international locations just like the Netherlands and Belgium that even have a coverage coherence.
So, they are saying how they wish to do it for growing international locations. However then, once you take a look at the nation itself, like Ghana or Zambia, what does the nation want? And there’s a lack of nation possession on this coverage coherence, so ultimately, the EU decides what coverage is required to realize sustainable improvement, however it ought to be about what the growing international locations want and require. I believe that we have to align EU coverage coherence with the growing international locations’ wants. That isn’t a political situation. It’s extra about what the nation wants and the way it can obtain its sustainable improvement objectives. And the coverage coherence ought to take into account the 2030 sustainable improvement agenda, and the 2063 African improvement agenda, as a result of that’s one thing that we don’t take into account in a complete method.
So, this type of work can be attention-grabbing to see within the enter and output—how we hyperlink the 2. After which for those who speak about throughput, then the query is in regards to the course of. In fact, we additionally understand how the EU choices are being made with the administrators and the way the method is clear.
To sum up, in respect of growing international locations, to extend the belief of growing international locations within the EU, the time is now for the EU to maneuver from support in direction of efficient coverage coherence, and to contribute to giving a voice to growing international locations in worldwide negotiations.
On the EU stage, the EU must have a transparent path, which incorporates clear objectives, targets, and alignment between EU international locations and EU establishments. The outcome will likely be extra legitimacy and belief amongst EU residents and EU international locations, and extra competitiveness for the EU within the world financial system.
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