The European Commission recently presented its proposal to change tax decision-making at EU level from unanimity voting to qualified majority voting (QMV) at a Council meeting of Economic and Financial Affairs ministers (ECOFIN) in Brussels.

According to ECOFIN’s press release, a considerable number of ministers called for the current balance of voting rules in taxation to be maintained, while others showed openness towards examining whether there is room for improvement. The impressive track record of EU tax legislation under the current unanimous voting system was noted, as well as intergovernmental work (Code of Conduct Group), under the current rules of the treaties.

German Finance Minister Olaf Scholz voiced his support for a debate on the qualified majority voting system on issues such as foreign relations and taxation in an interview with CNBC. Ireland maintains its position that taxation is a sovereign Member State competence and decisions at European Council on tax matters must require unanimity.

The legal basis for the EU to act on certain taxation matters is established by the EU treaties. The general rule is that the Council acts unanimously as the sole legislator on tax proposals, under the special legislative procedure (articles 113 and 115 of the Treaty on the Functioning of the European Union (TFEU)). The unanimous agreement of all EU Member States is necessary in order to change to a QMV system of voting on tax matters.