The European Parliament's Subcommittee on Tax Matters (FISC) on February 6, 2025, held a public meeting with the European Commissioner responsible for tax, Wopke Hoekstra. Key takeaways from the meeting include:
- Pillar Two: Commissioner Hoekstra expressed his regrets about the U.S. position on the global Pillar Two agreement, but assured the FISC that the EU will not withdraw from the global Pillar Two agreement and will stick to its commitments. Nevertheless, he noted that the European Commission (EC) is willing to explore possible responses at the level of the OECD Inclusive Framework and to proactively engage with EU member states with a view to avoid uncertainty for businesses operating in the EU.
- Pillar One and digital services tax (DST): Commissioner Hoekstra also reaffirmed the EC’s commitment to reaching a global agreement on Pillar One with a view to achieving a fair contribution from the digital economy. However, he noted that he cannot predict at this stage whether such businesses will eventually be brought into the scope of taxation as a result of an international agreement, whether there is sufficient room to agree on such measure at the European level, or whether member states will in the end apply “roughly similar” unilateral DST regimes "with differences because of national ramifications.”
- Transfer pricing directive: Commissioner Hoekstra noted that the proposal has been blocked at the level of the Council, but he is not prepared to give up on the proposal as he believes it adds value for the EU. At the same time, he confirmed that the EC is working with member states on an alternative “soft law” solution in form of a new EU transfer pricing platform.
- Existing and pending tax files: Commissioner Hoekstra indicated the EC’s aim to streamline the anti-avoidance directive (ATAD) and improve the exchange of information for tax purposes with a view to tackle complexity and red tape. He further noted that the EC will continue its work on current legislative proposals including the BEFIT initiative.
Read a February 2025 report prepared by the KPMG’s EU Tax Centre