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Cities and regions express their views on the sharing economy, the Trade in Services Agreement and a fair corporate tax system

Committee of the Regions | 29 September 2015

Cities and regions express their views on the sharing economy, the Trade in Services Agreement and a fair corporate tax system

On 29 September, the Commission for Economic Policy (ECON) of the EU Committee of the Regions (CoR) held an external meeting in Gelsenkirchen, Germany, at the invitation of Markus Töns (DE/PES), member of the North Rhine-Westphalia Regional Parliament. On the agenda was the adoption of the draft opinions on the sharing economy, which includes businesses like Uber and Airbnb, on the local and regional dimension of the Trade in Services Agreement (TiSA) and on proposals for a fair and efficient corporate tax system.

The "sharing economy” (SE) describes a type of business built on the sharing of resources – allowing customers to access goods and services without ownership. Platforms like Uber and Airbnb have made the concept both popular and controversial as it lacks clear legal rules. The rapporteur of the relevant CoR draft opinion, Benedetta Brighenti (IT/PES), deputy mayor of the municipality of Castelnuovo Rangone, pointed out : “SE is a growing part of the economy, which is not only aimed at maximising own profit and but can also have a beneficial social, economic and environmental impact". However, she warned against the negative results of SE, urging the European Commission to scrutinise impacts on personal economic security and social welfare as well as on pre-existing markets. "There is no doubt that some regulation is needed, but we must strike a balance so as not to stifle economic innovation", she insisted.

Members of the ECON commission also discussed the TiSA, which has been under negotiation since early 2013, involving 52 members of the World Trade Organisation (WTO), including the EU, with the aim of liberalising the services sector to create jobs and growth. The draft opinion by Helmuth Markov (DE/PES), Minister for Justice, Europe and Consumer Protection of Brandenburg, points out that local and regional authorities must be able to provide services of public interest at any time. He also favours a "positive list" of policy areas to be covered by the agreement instead of the envisaged "negative list" of spheres excluded as this would make much clearer which policy areas would be affected by the agreement. "TiSA must not encroach on the sovereignty of national governments and LRAs in spheres like education and culture or labour and environmental protection", underlined the rapporteur, calling for the inclusion of a social chapter, which would lay down social protection standards based on the relevant ILO conventions”. He also urged a second public hearing to be held and called for the negotiations to be conducted in an open manner, including developing and least developed countries.

ECON members also voted on the draft opinion on a fair and efficient corporate tax system, by Jean-Luc Vanraes (BE/ALDE), member of Uccle Municipal Council. This opinion criticises the complexity of corporate taxation systems in the EU. Whilst small businesses suffer from this complexity, some large companies use the loopholes in order to avoid paying tax. In consequence, Member States, regional and local authorities lose on potential tax revenue. Mr Vanraes argues that fighting tax evasion could enable local and regional authorities to lower tax rates for everyone. He also supports the implementation of a common consolidated corporate tax base (CCCTB). “A CCCTB can help fight tax fraud, tax avoidance and harmful tax competition, while strengthening the single market and reducing administrative burdens for companies. Using a single set of tax rules instead of 28 would have positive effects on economic growth, employment and tax quality as well as on public finances, including those of local and regional authorities”, according to Mr Vanraes.

All three opinions will be submitted for adoption to the CoR plenary session of 3-4 December 2015.

 source: Committee of the Regions