The Economic and Financial Affairs Council was held in Luxembourg on 19 October 2010. The following items were discussed:
Administrative Co-operation in the Field of Taxation
This directive aims to improve arrangements for exchange of information on request and bring the EU into line with OECD standards. It also extends automatic exchange of information, which the UK supports to the extent that this does not impose disproportionate burdens on business or on tax authorities at a time of fiscal consolidation. The Council agreed that they would aim to reach political agreement on this issue at their November meeting.
VAT Reverse Charge Derogation
The Council agreed that a new derogation should be provided, until the end of 2013, to Germany, Italy and Austria, allowing the application of a reverse charge to mobile telephones and computer chips. The Council also agreed to extend, until the same date, the UK’s VAT reverse charge to domestic trade in mobile phones and computer chips. The reverse charge has been a key component in reducing VAT fraud and has helped protect billions of pounds since 2007.
Stability and Growth Pact
The Council discussed Lithuania and Romania’s excessive deficit programmes. They agreed that the actions taken by both countries represented adequate progress towards the correction of excessive deficits within the deadlines set by the Council, and that no further steps under the excessive deficit procedure were required at the moment.
Debrief on the Informal ECOFIN Meeting
The Council briefly took stock of discussions held during the informal ECOFIN in Brussels on 30 September and 1 October.
Preparation of the G20 Ministerial Meeting
The Council endorsed the terms of reference for the G20 ministerial meeting in South Korea on 22 and 23 October. These will form the basis of the EU’s contribution to the meeting. The Government believe that these reflect UK priorities. However, since the UK’s views are represented through the separate UK seat in the G20, the UK is not bound by these terms of reference.
The Council adopted conclusions on a Commission report on tertiary education. The UK is content with the report, which was commissioned by the May ECOFIN Council to assess the efficiency and effectiveness of public spending on tertiary education.
Report on Fiscal Frameworks
Ministers adopted Council conclusions which welcome a report on fiscal frameworks. The Government support the report, which highlights common features of successful national experiences in the Netherlands, Sweden and Austria.
Preparation for European Council: Levies and Taxes on Financial Institutions
ECOFIN agreed a report to the European Council on levies and taxes on financial institutions. The Government are content with the report, which recognises that there is no consensus on how national Governments should deploy the proceeds from bank levies. It states that an EU-only financial transaction tax could result in significant distortion of competition and relocation of financial activity within the global financial system, so careful analysis needs to be carried out.
Alternative Investment Fund Managers Directive
The Council reached unanimous political agreement on the presidency’s compromise text on the alternative investment fund managers directive. This will now form the basis of further discussions with the European Parliament, which is due to vote in plenary session in November. This agreement represents a number of significant gains for the UK from the ECOFIN general approach of 5 May, including provision to extend the marketing passport to managers and funds outside of the EU. The Government also successfully ensured that the agreement limits the powers of the European Securities and Markets Authority to those already provided for in the package on financial supervision.