The European Parliament’s Subcommittee on Tax Matters (FISC) has convened a public meeting with Wopke Hoekstra, the European Commissioner for Taxation, on 6 February 2025.

The highlights of the meeting are as follows:

Pillar Two

Commissioner Hoekstra regretted the US stance on the global Pillar Two agreement but assured the United States Foreign Intelligence Surveillance Court (FISC) that the EU would uphold its commitments and not withdraw. He added that the European Commission is open to exploring responses within the OECD Inclusive Framework and will work with EU member states to reduce uncertainty for businesses operating in the EU.

Earlier, US President Donald Trump issued a memorandum to the Treasury Secretary and US Trade Representative to withdraw from the OECD’s “Global Tax Deal” on 20 January 2025. This deal includes the Pillar One and Pillar Two frameworks, which are now being implemented in the EU and other regions.

Pillar One and digital services tax (DST)

Commissioner Hoekstra reiterated the European Commission’s dedication to securing a global consensus on Pillar One to ensure fair taxation within the digital economy. However, he noted whether such businesses will be included under an international agreement, if a European-level measure can be agreed upon, or if member states will adopt “roughly similar” unilateral DST regimes with national differences.

Earlier, the Trump Administration released a memorandum titled “Defending American Companies and Innovators From Overseas Extortion and Unfair Fines and Penalties” on 21 February 2025. The memorandum was aimed at defending American companies and innovators from overseas extortion. The memorandum also includes renewing Section 301 investigations into foreign digital service taxes (DSTs).

Transfer pricing directive

Commissioner Hoekstra noted that the EU Council has blocked the proposal but remains committed to it, believing it adds value for the EU. He also confirmed the EC is collaborating with member states on an alternative “soft law” solution through a new EU transfer pricing platform.

Existing and pending tax files

Commissioner Hoekstra stated the EC’s goal is to simplify the anti-avoidance directive (ATAD) and improve tax information exchange to reduce complexity and red tape. He also noted that the EC will continue to work on current proposals, including the BEFIT initiative.