In a proposal made ahead of a videoconference meeting of EU leaders on Thursday, Spain said that the erosion of tax bases and corporate tax competition were weak points in the economic integration of the EU. The country also supports the gradual adoption of so-called qualified majority voting in the EU on tax matters.
Taxation is one of the few legislative areas in the EU that requires unanimity for laws to change.
The comments come as part of a broader proposal to help the European Union recover from the COVID-19 pandemic, which has forced countries to shut down their economies and public life in ways unprecedented in peacetime. The restrictions are due to result in economic damage not seen since at least the Great Depression.
"The EU should advance towards full tax harmonization and the eradication of all unfair tax practices between member states," said the text, which was dated April 19.
The document didn't go into any more detail about what exactly was meant by full harmonization and what was considered unfair tax practices.
The Spanish representative to the European Union didn't have an immediate response to a request for comment.
For years, the European Commission, the EU's executive arm, has been pushing for harmonization of the corporate tax base in the bloc, but that has run into opposition from countries that want to maintain the ability to use tax as a way to attract business and investment.
The commission has also proposed a gradual shift toward qualified majority voting on tax issues, but thus far has achieved little traction on the proposal. The commission's top tax official has linked a shift to qualified majority voting to efforts to change the rules on energy taxation in the EU to make them more in line with the bloc's energy objectives.
The Spanish proposal also calls for a "recovery fund" of up to €1.5 trillion ($1.6 trillion) to allow stricken countries to receive grants to help their economies rebuild while not adding to their debt.
"The fund should support the financing of post-crisis economic reconstruction in a coherent way at European level," it said, with priority given to programs that would "jump-start the ecological and digital transition of the economy."
The EU is grappling with different paths out of the economic crisis. Finance ministers this month approved a half-trillion-euro relief package that involved loans from the EU's bailout fund as well as recovery financing from the EU's investment bank.
Southern European countries, most prominently Italy, are pushing for more joint financing that would allow fiscally weaker countries to take advantage of the stronger position of northern countries when borrowing. Some northern European countries, most prominently the Netherlands, however, have said that they firmly oppose such joint financing.
--Editing by Robert Rudinger.
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