The European Commission has called for a debate on reforming decision-making for areas of EU taxation policy, which currently requires unanimity among member states.
This unanimity often cannot be achieved on crucial tax initiatives, and can, it says, lead to costly delays and sub-optimal policies.
Documents published following today's commission meeting suggest a road-map for a progressive and targeted transition to qualified majority voting (QMV) in certain areas of shared European Union taxation policy, as is already the case with most other EU policy areas.
Moving to QMV would also mean allowing the European Parliament to vote on taxation measures, something it is not currently allowed to do.
EU Tax Commissioner, Pierre Moscovici, says the commission is not proposing any change in EU powers in the field of taxation, or to the rights of Member States to set personal or corporate tax rates as they see fit.
"The aim is to allow Member States to exercise more efficiently their already pooled sovereignty so that shared challenges can be addressed more swiftly," he said.
Commission President Jean-Claude Juncker, who had called for a move to qualified majority voting in taxation in his recent State of the Union addresses, said: "Our increasingly globalised economies need modern and ambitious tax systems. I remain strongly in favour of moving to qualified majority voting and a stronger voice for the European Parliament on the common future of taxation in our Union."
"The EU has had a role in taxation policy since the origins of the Community six decades ago," said Commissioner Moscovici.
"Yet if unanimity in this area made sense in the 1950s, with six Member States, it no longer makes sense today."
"The unanimity rule in taxation increasingly appears as politically anachronistic, legally problematic and economically counterproductive."
"I am fully aware of how sensitive an issue this is, but that cannot mean that the discussion is off limits. So let's begin this debate today."
In today's communication, the commission asks that EU leaders, the European Parliament and other stakeholders assess the possibility of a gradual, four-step progression towards decision-making based on qualified majority voting:
Step 1: Member States would agree to move to QMV decision-making when it comes to measures that improve cooperation and mutual assistance between Member States in fighting tax fraud, tax evasion, as well as for administrative initiatives for EU businesses, such as harmonised reporting obligations.
It says these kind of measures are usually welcomed by all Member States but are prone to being blocked for reasons unrelated to the issues at hand.
Step 2: Would introduce QMV for measures in which taxation supports other policy goals, such as fighting climate change, protecting the environment or improving public health.
Step 3: Would see the use of QMV to modernise already harmonised EU rules such as VAT and excise duty rules.
The Commission argues faster decision-making in these areas would allow Member States to keep up with the latest technological developments and market changes to the advantage of EU countries and businesses.
Step 4: Would see the use of QMV for major tax projects, such as the Common Consolidated Corporate Tax Base (CCCTB) and a new system for the taxation of the digital economy.
The commission argues they are needed to ensure fair and competitive taxation in the EU.
Today's communication suggests that Member States consider developing Steps 3 and 4 by the end of 2025, with steps one and two introduced much earlier.
Action in the areas outlined would be possible under the so-called 'passerelle clause' (Article 48(7) TEU) in the EU Treaties which allows for a shift to qualified majority voting and the ordinary legislative procedure under certain circumstances.
No EU Treaty change is necessary.
The commission would like member states and the European Parliament to "engage constructively in a debate on QMV in EU tax policy, and to define a timely and pragmatic approach for its implementation".
It particularly wants EU leaders to endorse the road-map published today.
But Chambers Ireland has warned that changing to QMV would hurt Irish competitiveness.
"Taxation is and should remain a sovereign Member State competence in order to maintain and preserve Irish competitiveness in relation to our European partners," said Ian Talbot, CEO of the organisation.
"Changing to weighted majority, rather than unanimity, will dilute and hinder sovereignty on these matters.
"Ireland competes with many non-EU jurisdictions for Foreign Direct Investment and these new proposals will also potentially lead to a loss of opportunity for the EU, not just Ireland."