European venture capital funds
Member states reject Presidency’s agreement
By Ophélie Spanneut | Tuesday 17 July 2012
The Danish EU Presidency went too quickly with its announcement, on 28 June, that it had reached a first-reading agreement with the European Parliament on European venture capital funds. At the 11 July meeting of the Committee of Permanent Representatives of the member states (Coreper), several participants refused to back the text agreed by the negotiators for Parliament, the Council and the Commission. Their rejection of the text is related to the issue of tax havens.
MEPs voted to exclude tax havens from funds granted the European passport as a way of reducing risks of tax evasion. The negotiators back the principle but had a much harder time agreeing on a list of tax havens (see
Europolitics. 4463 and 4455). The compromise, worked out on 28 June and announced proudly by the Danish Presidency, establishes that venture capital funds may be registered in non-EU countries provided these countries do not offer extremely advantageous tax treatment. For Coreper, however, “it is not appropriate to address taxation-related issues [decided unanimously by member states] in financial services legislation”
The agreement of 28 June was simply a political agreement that had to be confirmed by the 27 and “reflects only the Presidency’s views,” as one diplomatic source put it.
For the European Venture Capital Association (EVCA), this setback is disappointing. Since the first-reading agreement cannot be endorsed, a second reading will be required, which could require many more months of negotiation. EVCA Secretary-General Dörte Höppner urged law makers to work out a compromise “as soon as possible”. “This important legislation for Europe’s economic future should not be put at risk by extended further delays.”(1)
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