Proposition 54K1020

Projet de loi portant assentiment aux actes internationaux suivants : 1° Convention entre le Royaume de Belgique et la République des Seychelles tendant à éviter la double imposition et à prévenir la fraude fiscale en matière d'impôts sur le revenus, faite à Bruxelles le 27 avril 2006; 2° Protocole, fait à Bruxelles le 14 juillet 2009, modifiant la Convention entre le Royaume de Belgique et la République des Seychelles tendant à éviter la double imposition et à prévenir la fraude fiscale en matière d'impôts sur le revenu, faite à Bruxelles le 27 avril 2006; et adaptant la législation fiscale belge à certaines dispositions desdits actes internationaux.

General information ¶

Submitted by

MR Swedish coalition

Submission date

April 15, 2015

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

Seychelles tax convention tax avoidance double taxation tax on income international agreement

Voting ¶

Voted to adopt

CD&V LE ∉ Open Vld N-VA LDD MR PP

Voted to reject

Groen Vooruit Ecolo PS | SP PVDA | PTB VB

Party dissidents ¶

• Olivier Maingain (MR) abstained from voting.

Contact form ¶

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Discussion ¶

May 28, 2015 | Plenary session (Chamber of representatives)

Full source

The rapporteur, Ms Grovonius, refers to her written report.

This is not the first time that our assembly is addressed to a convention aimed at avoiding double taxation and preventing tax fraud in the field of income tax. This type of conventions is based on an OECD model that we find in other tax conventions signed with other countries. The conclusion of these types of agreements allows Belgium to recover due taxes and thus to fight tax fraud.

I will not make the report of Mrs Grovonius’ Committee on Foreign Relations since she referred to her written report. Different types of questions were asked. We had debates both on the organization of the work and on the confidence we had in the Seychelles, etc. I will just take back this latter aspect: it is well known, dear colleagues, that the Seychelles have, in this area, a reputation as a paradise destination. The banks there have a reputation for banks with discreet practices.

The Seychelles no longer have a choice. They must comply with the OECD standards. They are controlled by banking thresholds and will still need to make progress in the exchange of financial and banking information. Progress has been made in recent years. Are they sufficient? and no. We are still waiting for improvements on their part. The Seychelles have committed to fulfilling a number of obligations.

Without naivety, and with tenacity, our tax administration will have the opportunity to test the reliability of the information provided. Let’s trust the financial officers. They show rigour and professionalism. The convention we ratify contains mechanisms for exchange of information and anti-abuse measures: let’s apply them. Let us be vigilant and remain demanding!

Mr. Speaker, Mr. Minister, colleagues, I have already made an effort in the committee to convince my colleagues that it would be a very unwise decision to approve the treaty.

I will repeat my arguments for the members who are not lucky enough to be part of the Committee on Foreign Relations.

In essence, double tax treaties have two functions. First, they must avoid having to pay taxes twice on the same income, which would not be fair. In the globalized world in which we live, my group and I believe that systems should be sought that at least allow income to be taxed once in a fair and correct way. Everything cannot be taxed twice.

The second function of double tax treaties is to ensure that, once the treaty is signed, in accordance with one of the Articles – usually Article 26 – the exchange of information becomes possible.

I must point out that the treaty presented to us today, which is the treaty relating to the Seychelles, is not necessary to avoid double taxation. This is simply because in Seychelles there is a very special regime for companies.

When I really simplify it, that regime – it is nothing less than the truth – sees it as follows: in the Seychelles a company is taxed only on the profits made by its activities on the territory of the Seychelles. Thus, those who have a company in the Seychelles and develop business there must pay taxes in the Seychelles. In other words, a multinational company based in the Seychelles can easily divert all the profits it makes in the rest of the world to the Seychelles. In the Seychelles, these companies do not have to pay taxes on their profits.

If a double tax treaty is signed between Belgium and the Seychelles, as proposed by the majority, it means that the profits collected in the Seychelles can be transferred to Belgium. Depending on the circumstances, a tax must be paid between 0% and half of the company tax in Belgium. Colleagues, instead of having a treaty in which income is taxed only once, the income under this treaty will either not be taxed, or will be taxed at 50% of the tax in Belgium. Instead of a double tax treaty, a double non-tax treaty is signed.

I ask the colleagues of CD&V, N-VA, Open Vld and MR if they think it is fair that Belgian multinationals, of which we know that some have gone behind to get such a treaty signed, will not be taxed their foreign profits or up to half the taxes that Belgian companies have to pay on their Belgian activities. Do you think that is fair? Until now, I have not heard any of the majority’s colleagues give a decisive argument on why they think it is in favour that Belgian companies be taxed at 100% while foreign profits should not or be taxed at 50%.

As I said, the second function of a double taxation treaty is to ensure that information is exchanged. For reliable information, one depends on the reliability of the partner, in this case the administration of the Seychelles. The OECD carries out a peer review and checks for all countries whether or not they properly comply with international agreements on the exchange of information.

Today, a new OECD list has been published. Since November 2013, Seychelles have been on the OECD blacklist of non-compliant countries. The Seychelles are therefore not reliable when it comes to fulfilling the obligations it has undertaken through treaties or international agreements in the field of exchange of information.

Colleagues, for the second time I try to make it clear to you that it is not wise and ⁇ not good for a level playing field between companies, for competition, for our state income, that the proposed treaty would be signed.

Moreover, and with it around me, it is contrary to the international commitments that we have taken on us in the OECD. In a 2014 document, Preventing the granting of treaty benefits in inappropriate circumstances, the OECD calls on all member states not to enter into double tax treaties with known tax havens and ⁇ not with countries on its blacklist.

Colleagues, almost all respectable, tax-civilized states follow that advice. If you vote yes later, it means that Belgium joins countries that are acting contrary to international obligations and the international agreements made. I will read the list of those countries slowly, so that you know, colleagues of the majority, to which group of countries our country joins thanks to your “yes” vote. The following countries have also, against the international trend in, a double taxation treaty with the Seychelles: San Marino, the island of Man, Bahrain, Ethiopia, Monaco, Zambia, Indonesia, South Africa, Botswana, Barbados, China, Cyprus, Malaysia, Mauritius, Oman, Qatar, Thailand, the United Arab Emirates, Vietnam and Zimbabwe.

If you approve the treaty later, we will join those types of countries. Anyone who has listened carefully has noticed that there is one EU country between them, Cyprus. That country is known as a fiscal paradise where financially not too clear things are committed. The OECD has placed Cyprus, like the Seychelles, on the blacklist.

Colleagues, I make a final call to you not to shame our country. Let us not add our country to the list of countries that are known to be fiscally very impure. I hope you will use the few minutes that we have left for the moods to examine your conscience. I hope you make the right choice and do not approve the proposed treaty.

I will begin with a regret. The members of the Foreign Relations Committee rejected the request we had made. We wanted to obtain a prior opinion from the Finance Committee, which regularly works under the guidance of its chairman on issues of combating tax fraud at the national and international level – ⁇ in the wake of recent disclosures such as LuxLeaks.

The question that arises here is whether this treaty, in its “non-double taxation” component, does not risk opening new opportunities for those who want to escape tax and practice tax evasion internationally. An opinion from the Finance Committee would have been helpful. In the meantime, I will give you my own opinion on this issue.

This treaty has two parts. The first concerns the exchange of information between the tax administrations of the Seychelles and Belgium. This is a global trend following the work of the G20 and under the impetus of the OECD. This development is positive and necessary. We hope that this principle, defended by the OECD, will be quickly, fully, balanced and generally translated into national legislation.

Fast, because the trend in the fight against tax evasion is to take its time. So many decisions are made very quickly in other matters. For information exchanges, it is always "too early and too quickly". The deadlines are insatisfactory in view of the problems.

Comprehensively, because it is necessary to be able to incorporate in such international agreements, including at the European level, all the data useful for calculating the contribution of the interested parties. I think in particular of the issue of rulings, which we discussed last week with representatives of the Tax Committee of the European Parliament. Opacity is organized by states, including ours, in this area.

In a balanced way, because unfortunately not all countries have the same capacity to develop efficient administrative services. I think of developing countries. For these, customized and generalized conditions are needed, as the aim is that this tax information can circulate between the relevant administrations globally, so that each state can eventually calculate the just contribution to the financing of its collective functions and solidarity.

This aspect of the Treaty is not problematic, even if the latest standards, i.e. automatic exchange of information and not on-demand exchange, were expected to be proposed, especially since Seychelles are not very cooperative in providing information to foreign tax administrations beyond the agreements.

The treaty includes a second element, the non-double taxation treaty. This is different, not that we estimate that our companies that work abroad need to be taxed twice. This is really not the point. During the debate, this is an argument that was used by some colleagues. If we relativize the activity of Belgian companies in the Seychelles (a little drag and activity around the minerals that have not been specified to us), it is obvious that the Belgian companies that are active in the Seychelles do not have to pay twice the tax but there is a way to settle this issue other than through a non-double tax treaty. Other states, notably the Netherlands, take into account, without a non-double tax treaty, taxes already paid abroad by their companies. This can be done unilaterally in Belgium.

In order for there to be a useful and valid non-double tax treaty, it is necessary that the country with which we contract ensure a fair and transparent contribution from companies, that the levels of taxation are close to ours and that this country plays the game, in other words, that it is not a tax haven. This is not the case with Seychelles.

I will refer to the latest OECD report from February 2015, which classifies, as Mr. Van der Maelen before me, the Seychelles as well as the Grand Duchy of Luxembourg, Cyprus and the British Virgin Islands in the jurisdictions that are non-compliant, that is, which do not abide by the rules of the game or which, in other words, are tax havens. IBC legal structures are ⁇ challenged. They are generally used in Seychelles and there is total opacity as to who owns them and how much income they generate.

In addition, Seychelles have quite aggressive advertising practices. By financial and economic choice of the authorities of the country, they want to be a platform, a hub, between Africa and Europe, not to develop a real economic activity but to constitute financial platforms that serve, as I stressed in the discussion in the commission, to loot the natural resources of the countries of the South. Several reports from the European Parliament have highlighted this, including that of a commission chaired by French MEP Eva Joly.

The third element, also recent, is the fact that Seychelles are multiplying the signing of treaties with other countries that can be classified as tax havens. Based on the latest information, and despite the hopes we could have in the continuity of the policy developed under the OECD’s impulse, something is not working in the Seychelles. The Seychelles do not play the game and want to remain a tax haven.

Signing a non-double taxation treaty with a tax haven is problematic; that is why we did not vote on this text in a committee, and we will not vote on it in a plenary session.

I would like to make a paragraph for mr. Miller and Mr. Germany, which justly stressed in a committee that this treaty did not know its first step in the Federal Parliament but that it had been discussed in other parliaments, in particular in the Walloon Parliament in February 2014. I moved on to these works. You will agree with me that February 2014 is earlier than February 2015. With the latest information obtained from the OECD, which considers that the Seychelles do not cooperate usefully, the expected developments have not come true.

I also recalled the speech of my colleague Wallon MP, Luc Tiberghien, who emphasized the status of Seychelles as a tax haven. At that time, he expressed the hope that the signing of this agreement would contribute to a real evolution of the Seychelles, which is obviously not the case today, May 28, 2015, given the information we have. This justifies the vote that we will make soon.

By multiplying this type of treaties, the risk is to recreate new grey zones, which is contrary to the global goal of fighting fraud, of fighting tax havens, of good perception of the contributions of companies, in this case multinational companies. Generally speaking, since this is not the first treaty of its kind to be voted at the federal level, I think we must give ourselves time to evaluate the treaties already signed and check whether they are not used, through a tax engineering such as LuxLeaks has been able to bring it to light, for tax avoidance purposes. The principle of not taxing a company twice is indisputable, but we cannot, in the name of this principle, create new grey zones that are used by those who do not properly play the game of their contribution to the financing of collective functions and solidarity.

The risk of this treaty is to create a new grey zone, I repeat, with a state that obviously has decided to base its wealth on this type of tax practices that we denounce.

Mr. Speaker, I will summarize a few points that I have not heard enough in the debate so far. These are some important points for our group.

The signed agreement follows, in our opinion, largely the OECD model for tax treaties, with a supplement to the provisions of the agreements relating to the exchange of information. Despite the fact that this is present, the Belgian delegation has yet to introduce a general anti-abuse provision for precautionary reasons. It is inspired by exemplary provisions of OECD model conventions.

We will therefore approve the draft law, since we believe that sufficient conditions have been met and the precautionary principle has been taken into account. As Minister Van Overtveldt has already cited, a security will be installed in case the taxes paid in the Seychelles are extremely low. You can understand that as taxes of less than 15%. In that case, the tax to be collected in Belgium would be only half and therefore not completely discharged.

Furthermore, we must not overlook that there are also economic interests for such a treaty. Our companies are also interested in the aspect of the Convention on the avoidance of double taxation. After all, we are not the only country in the EU that has already concluded such a treaty with the Seychelles. Similar treaties have already been signed by Luxembourg and Cyprus.

Finally, I would like to point out one point that I actually don’t really understand, ⁇ because I’m quite new. The treaty was easily approved in the regional parliaments in 2013 and 2014 by the opposition parties now shouting murder and fire here. I recently heard the defense that the treaty for the regions is only a B-treaty and therefore actually not so important when it was approved. I wonder, therefore, whether the opposition parties might not have done their homework properly at that time, because apparently they had not taken into account that the treaty would still be on the table of the federal parliament. I just don’t understand.

Would you like to respond to what Mrs. Capoen said, Mr. Van der Maelen?

I would like to respond to two comments.

First, Ms. Capoen says the Cabinet has informed her that the treaty is an anti-abuse provision. I just said that the OECD applies very strict conditions. It does not want double tax treaties with tax havens to be signed. If one wants to sign a double tax treaty, the OECD requires two things.

First, an anti-abuse provision. You will say: Yes. However, it is not about this anti-abuse provision. This is an anti-abuse provision, old style. The so-called principal purpose test is not included.

Second, the OECD calls for limitation on benefits provisions, if double tax treaties are still signed in a new style. This is not included either.

If you do not want to vote away from that treaty today, please at least take the fair play of our international agreements with the OECD, postpone the approval today and adapt the treaty to the two new conditions that the OECD requires. But no, I already know that this majority really does not want to do a job in addressing the international organized tax fraud. They want to continue as they did before the crisis.

I come to your second comment, I have only checked this for the Flemish Parliament. Colleagues, you use this argument conveniently in order not to go to ruin. I just asked questions to my colleagues of the majority. I have still not received a response to this.

In our Constitution and institutional legislation it is very broadly defined that tax treaties must also be approved by the regional parliaments.

I have the decree here. What is the title of the decree? I will not read the title entirely, but he says that this treaty is about income taxes. tax of income. Now, on 29 May 2013, when it approved this, the Flemish level did not have any competence with regard to income tax. This means that this treaty has zero and zero importance and meaning for the Flemish Parliament.

I invite you to take a look at the procedure. The report of the Flemish Parliament. I have heard a Flemish government leader say, “What we do ourselves, we do better.” Well, colleagues, what the Flemish Parliament does is ⁇ not better. They put the treaty with the Seychelles in a long train with 27 other treaties. Those 28 treaties, 27 plus the Seychelles, were approved with an introduction of one page by Minister Muyters – of your party. I can give you the text. Half of that page is about the abolition of banking secrecy. Of the 124 colleagues in the Flemish Parliament, from opposition to majority, none opened his mouth on those 28 treaties. No one . No one from the SP, no one from Green, no one from Open Vld. This is how the treaty concerning the Seychelles was approved in the Flemish Parliament.

Colleague Capoen, I repeat again that this is not surprising, since it does not have any but therefore no impact on the Flemish budget. If one comes here to say that it was approved in the Flemish Parliament, then that was a stupidity. One cannot blame the colleagues, however, because they do not have a committee for Finance or a committee for Foreign Relations that deals with this issue.

Finally, I would like to comment in favour of my colleagues in Parliament. If you listened carefully to the dates, that treaty was approved on 29 May in the Flemish Parliament and only on 23 November the Seychelles were put on the blacklist. Our colleagues in the Flemish Parliament could not know that the Seychelles would be on that blacklist. You know that.

If, despite that information, you are going to add Belgium to the list of taxally uncivilized states in the future, then I am ashamed in your place. A moment of shame lasts only three seconds, then press that green button and it will be over.

It is pity. I promise you that I will do my best to remind you as often as possible of the shameful voice you will make later.

Mr Van der Maelen, I also reminded you in the committee of a vote in the plenary on 23 March 2014 on Bahrain. The same was approved.

I want to ask you a simple question. You were sitting here at the time. I am not yet, so I cannot know. Have you pressed the green button without shame? You did that then.

Mr Vandenput, I will give you the same answer as I gave in the committee. Bahrain is not on the OECD blacklist, but the Seychelles.

I ask this government, the majority in this Parliament, to have a little more respect for the international agreements that have been made.

You are putting the international credibility of our country at risk. If you agree internationally that you will not enter into double taxation treaties with countries blacklisted by the OECD, which the OECD considers non-compliant, and if you do so, you will undermine the credibility of our country. That will be your responsibility, not ours.

Mr Van der Maelen, Bahrain is also a tax haven. Belgium, by the way, is the same in the eyes of other countries, because we are in the 40th place.

Come to! I will give you the proof of the five countries (...).

The floor is yielded to Mr. Dallemagne.

I am very satisfied with the work of the Flemish Parliament. It is quite edifying. by Mr. Gilkinet has recently praised the work of the Walloon Parliament and its colleague Ecolo. He will not be able to emerge this argument that there was no work in the Walloon Parliament.

I remind you that my group will today approve this Bill on Consent and Convention, signed in 2006 by Belgium and the Seychelles, aimed at avoiding double taxation and preventing tax fraud in the field of income tax. This is the date: 2006. The accompanying protocol complements the Convention in order to enable the exchange of banking information and thus make the Convention compliant with international standards for the exchange of information. These are not the latest standards and I will return to them, but it complies with certain standards in any case.

This Additional Protocol was signed in 2009. I would like to mention these two dates. In 2006, there was a violet coalition that approved this agreement. The previous government approved this agreement in 2009. Subsequently, these texts were approved by the various regional parliaments, and in this case, in particular, by the Wallonian regional government and the Wallonian Parliament, on 12 March 2014 unanimously, without causing much debate.

We have had an exchange of views on this issue. Mr Gilkinet, you refer to the fact that Mr. Tiberghien had intervened on the Seychelles. I was seen again. You really need to wear a microscope to reconsider his intervention on the Seychelles. He had intervened on Gibraltar and welcomed that an agreement on the Seychelles could eventually improve the situation on these islands. Let us be careful, Mr. Gilkinet. You advance this argument, like a pirouette, emphasizing that “it’s not going so well today.” You have discovered, thanks to my intervention, that your group had ratified and voted this text last year. You didn’t know it when you spoke. You had not seen it.

I think this shows, beyond these peripeties, our coherence, our honesty and our transparency. We do not change, we do not climb barricades when we are in opposition to remain silent when we are part of the majority and that we have the ability to eventually change certain decisions. From this point of view, a little consistency is needed.

I like being a White Knight, but it’s better to be a White Knight when you’re really able to influence and change the decision. Now you know that you are not able to do this.

I would like to say that we will be consistent. We will approve this bill with assent. We think...

The [...]

What we have already voted and approved in government. You did it in government under the violet coalition, Mrs. Gerkens, I remind you, in 2006. If it is for you to oppose it in 2015, I do not quite understand what consistency is. At that time, you had the possibility of possibly opposing it. You didn’t do it: 2006, 2009, 2013, 2014 are so many dates when you could oppose this protocol, and you didn’t. I find it a little curious that you came in 2015 to tell us that this agreement is unbearable and totally unacceptable. You would have been more credible if you had said it from the beginning.

You will explain what your consistency is to you. As I said in the tribune, but I will repeat it, because you probably did not like the explanation, on the one hand, there was a critical intervention in the framework of the debate in the Wallon Parliament by my colleague Mr. and Tiberghien. I am referring to the report of the meeting and the committee. These are parliamentary documents.

On the other hand, there is a global evolution concerning the Seychelles with the OECD assessment of February 2015. You have pointed out that this text has been discussed for a very long time and that several governments have taken advantage of it, but there are new elements in the dossier, to which I referred in the committee and which I have just repeated here. There is the OECD’s latest assessment of Seychelles’ tax practices that are not evolving in the desired way to fight global fraud.

What should I do in relation to this finding? To keep silent, because a vote has been put before, that it does not seem to me consistent with the objective of combating tax fraud according to the information I have? Or alert my colleagues from the majority and the opposition to the fact that there is a problem with this text and invite them to review this viewpoint and question the Finance Committee, in order to enable it to conduct the necessary hearings in order to verify that we are not making a mistake? The situation is not the same as at the beginning or during the negotiation. That is simply what we did.

Rather than persisting in the mistake, if there is a mistake, I prefer to adopt a critical point of view based on the information I have at the time when I must vote and intervene in Parliament.

The [...]

Yes, he will be there at the time of the vote, Mrs. Fonck. Do not be ridiculous!

Again, Mr. Gilkinet, I can’t help but think that this is a pirouette, since you are talking about this element today and you didn’t do it in a committee. It is completely contradictory ... (brouhaha)

If you never let me answer... I know well that it annoys you that I confront you with your contradictions, while you teach us every time about this kind of thing. It’s been a quarter of an hour I’ve been at the tribune, and I’ve talked just two minutes!

If you say wrong things, allow me to correct them immediately. As a committee, I referred to the fact that the OECD report was subsequent to the vote of the Walloon Parliament. These are new information that I have ⁇ in the committee.

I find that you spend a lot of energy looking for the straw in the neighbor’s eye. I would be interested to know the opinion and methods of the CDH to fight against tax havens on a global scale.

Let me first answer you, since you interrupt me constantly. There is a major contradiction in your reasoning. You said in this interview that Mr. Tiberghien wanted this vote to take place because, thanks to this convention, we would be able to improve the fiscal situation. Today, you tell us the opposite: "We should not sign this agreement because the fiscal situation has not really improved."

For my part, I like consistency and I think it is better to have an inclusive mechanism of consultation, agreement, peer-to-peer monitoring and monitoring to try to improve things in the Seychelles. This is what we propose. From this point of view, Mr. Gilkinet, I would like more consistency on your part.

We will approve this bill because we believe that in fact, the signing of this type of agreement proceeds directly from the approach initiated several years ago by the OECD in terms of bank transparency and the fight against tax havens. This is precisely why this type of convention is absolutely indispensable. It should also be emphasized that while Belgium has intensified its efforts since March 2009 to sign such international agreements allowing the exchange of banking information as soon as possible, it is because it wanted, itself, to leave the OECD’s grey list of countries. Belgium has therefore signed a series of texts in a sufficiently rapid timeframe so that it can effectively itself comply with certain international standards. It is also for this reason that it has undertaken a series of steps with countries with which it has economic and commercial relations.

Regarding the particular case of the Seychelles and the history of the elaboration of this convention, it should also be noted that this convention only resulted when it was established, contrary to what you have just said, that the Seychelles had formally committed to complying with OECD international standards. The work of the OECD has not only resulted in the reduction of the harmful preferential tax regimes of the OECD member countries themselves, but also the formal commitments of a number of third countries to eliminate their harmful tax practices and to establish procedures for the exchange of information.

The Seychelles are one of those jurisdictions that were considered in 2009 as cooperative with the OECD. As of April 2009, the country was included on the OECD white list of countries that have effectively implemented international standards for the exchange of tax information.

Furthermore, as regards the fight against money laundering, it should also be noted that the Seychelles are not on the Blacklist of the Financial Action Group (FATF) on money laundering. The Seychelles, on the other hand, are part of the anti-laundering group, whose effectiveness in Eastern and Southern Africa can obviously be questioned, but it has therefore undertaken a series of steps. Efforts and commitments have therefore been initiated and implemented by the Seychelles and observed by the relevant organisations.

By signing these conventions and approving them today at parliamentary level, Belgium is part of these steps and efforts undertaken by the OECD. We therefore consider these texts to be a progress. This, of course, is not the “paradise” but it is a progression from the current situation.

I also note that the usual delays, which unfortunately affect the passing of these bills in parliament, make what we are examining today – you said it yourself – somewhat down from the practice and the actual progress of international negotiations on the exchange of bank information. Indeed, while this 2006 Convention and this 2009 Protocol establish an exchange of information on demand – which is already a good thing – the new standard developed by the OECD already plans to go further, by systematizing the automatic exchange of information, which would indeed be much better.

Among the many countries of the Early Adopters Group that have formally committed to implementing this new standard by 2007, we find Belgium but we also find Seychelles, which have committed to practicing this automatic exchange of information. This is, in our opinion, an indication of their willingness to continue to improve.

I hope that the government will do everything possible to comply with this new standard as soon as possible. Mr. Minister of Foreign Affairs, I would have loved to hear you on this subject. Will there be a new additional protocol on this automatic exchange of information? It is important that we can actually move forward in this area.

I’m not naive and I’m not saying that everything goes for the best in the best of the worlds. Although Seychelles have made undoubted efforts – they have met a number of international requests and have committed to implementing certain provisions – the recent OECD review points to the country for delays, gaps and non-compliance with certain provisions. It is not the only country that is pointed out. Luxembourg, a neighboring country, is also pointed out, but this does not prevent us from having economic, commercial relations and signing agreements with it. There are indeed a number of countries whose practices need to evolve and the Seychelles are one of them. It is important to be vigilant in this regard. The report of the Secretary-General, which you cited, actually mentions, as for Luxembourg or Cyprus, which are also considered to fail to meet their commitments in terms of transparency and data exchange. Nevertheless, the same report indicates that an additional assessment is underway for these three countries so that they can improve their rating by demonstrating that they have properly re-adjusted their practices.

Not everything is black or white, as some people like to present it. The Seychelles have made progress and have formally pledged to continue on this path. Participation in this OECD-led process and the implementation of conventions and protocols, such as those we look at today, put this country under the critical eye of its peers and the OECD, and that is exactly what we want. We must be able to have a mechanism for critical monitoring of their practices. Through these texts, Seychelles must undergo regular evaluations that note compliance with the measures thus required.

The finding that certain provisions are not properly applied in practice, the recommendations to correct the shooting if we do not want to remain poorly classified, all this will drive the Seychelles government to act voluntarily and unwillingly and, like Belgium, to reform and reform its practices.

In my opinion, it is better for Belgium to ratify this agreement with the Seychelles, legitimately regarded as a fiscal paradise, which has made progress but which, nevertheless, must constitute a source of monitoring on the part of the OECD and our country. The situation would be worse if the Seychelles had preferred to isolate themselves.

This ongoing process should be considered as a work in progress. Effectively, additional protocols could also be planned in the future to have a systematic exchange of information.

Certainly, there is still a long way to go before the Seychelles are completely clean, but today there is a procedure, conventions, in this case, those we are examining today, which allow us to have close monitoring, an inclusive mechanism to ensure that the Seychelles continue to progress on the path of transparency and on the path of its fiscal and administrative practices.

Mr. Dallemagne, I thank you for coming to your position after making the exegesis of ours. You highlight the progress made by the Seychelles in the context of the global trend in the exchange of information. But you do not take into account the latest OECD report. Like you, I would like to believe that what the OECD does and the evolution of the global exchange of information is positive in the fight against tax havens and in the fight against tax fraud. However, the latest data we have on how the Seychelles are evolving is negative.

Of two things one, either we sign the convention and therefore we no longer have elements of pressure on the Seychelles, or we limit it to the exchange of information. This is our attitude based on the latest information available to us, hoping that the non-ratification of this convention today will lead to real and sustainable developments in the head of the Seychelles. Indeed, the hopes that could be placed in 2009 in this evolution are currently not met in the light of the international developments achieved, as the OECD considers that they are non-compliant with regard to the exchange of information.

Mr. Speaker, if you allow me, I would like to plant the scene with the help of a little story. Do you know the island of Arros? It is an island in the Seychelles. The Seychelles are an archipelago. The island of Arros is an island that Liliane Bettencourt, one of France's biggest fortunes, friend of Sarkozy, bought for $18 million. This was done by two Swiss companies. It is a part of her wealth that she escaped the wealth tax in France. The Seychelles are very famous and Mrs. Liliane Bettencourt loves their tourist aspect very much. She also loves the appearance of the archipelago’s tax paradise.

This is what is surprising in this convention. We have already signed, but here we want to get us to vote on a convention designed to avoid double taxation with a country where there is no taxation, and which is a tax paradise. This is a bit surprising!

Several colleagues took on the following idea in the Motive Exposure: there would be an evolution in Seychelles policy. I quote: "The fiscal climate surrounding the Seychelles has, however, evolved." And we continue with all the supposed positive evolution of the Seychelles. Why claim that the Seychelles are not a tax haven when all the facts, if one proceeds to an objective analysis, show that they are indeed one, except that they have signed a minimum of twelve conventions with other countries, which are also tax havens like my colleague Mr. M. Did Van der Maelen say that?

Why say that the Seychelles are no longer a tax haven when officially, for Belgian legislation, they are one? In fact, in the Royal Decree of Implementation of the Income Tax Code, the list of countries considered as tax havens for definitively taxed income materials (RDTs) is provided. What do we see in this list? Fifty-three countries, and, between São Tomé and Somalia, there are the Seychelles. It is strange! In the official Belgian royal decree, the Seychelles are a tax haven, but in the exhibition of motives and in the exhibitions of colleagues, one tries to demonstrate the opposite. This is still surprising!

Furthermore, the fact that the Seychelles are on this list of tax havens cited by the royal decree raises a question about RDTs and the dividends that rise, since it is said in the convention and in its commentary that the RDT regime is applicable to the conditions of the law. Are these the general terms of the law, or is it to exclude the Seychelles because they are on this list? In this case, one asks why it is said that RDTs are applicable.

Some point to another problem. By signing this agreement with the Seychelles, we risk reviving the QFIE case that prompted the opening of an investigation committee of this House on large tax fraud. Will this kind of affair happen again?

What’s quite striking is that in the exhibition of the patterns, it is recognized that the Seychelles are an offshore financial centre. There seems to be a distinction between tax havens and offshore financial centers, but if you read the literature on the subject – I think in particular of John Christensen, director of the Tax Justice Network – it is obvious that these are two aspects of the same reality. Thank you for the quote that explains it.

When we look at the situation closely, we find that the Seychelles is indeed a notorious tax haven. All the ingredients are combined. You can check out the website www.paradisfiscaux20.com; some MR colleagues may be interested in knowing where to put money safely! Find out where are the best tax havens in 2014. The Seychelles are back.

The Tax Justice Network, the non-governmental organization specializing in the fight against tax havens, has drafted a ranking of countries by index of financial opacity in descending order. Who is number three on this list? The Seychelles . This country is therefore one of the best examples of financial opacity in the world. They are on the podium with the bronze medal.

With a few clicks, with the URL I provided to you, you can create an offshore company in the Seychelles and thus enjoy the benefits that are offered to you.

As for the OECD, its practice in the fight against tax havens has evolved and the Seychelles have benefited. Until 2001, the OECD had given four criteria for defining a tax haven: non-existent taxes, lack of exchange of information, lack of transparency, and lack of substantial activities of registered companies. The OECD has abandoned these four criteria to retain only one, the exchange of intelligence. Obviously, the Seychelles have plunged into this breach to appear as a good example and be placed on the white list as Mr. Germany has mentioned.

It was easy for the Seychelles to sign twelve agreements with other tax havens, including Belgium. We wonder whether this partnership does not demonstrate that Belgium is also a tax haven, a thesis that is commonly defended.

With this treaty, our country offers a certificate of respectability to the Seychelles, while – if you follow the OECD standards, which I criticize – even the trade union minimum that is asked for it is not respected. Indeed, the latest OECD report shows that phase 2 of evaluation has failed and that the Seychelles do not meet their commitments on information exchange.

Seychelles holds ⁇ €7 trillion in financial assets and is home to 64,000 companies managed by approximately 60 intermediaries. They are very strong, these intermediaries!

To conclude, at the time of SwissLeaks, LuxLeaks, PanamaLeaks and OffshoreLeaks, I think that the vote that we feel is drawn on the side of the majority goes in the opposite direction of the international movement to fight against tax havens. I ask the question: Will a SeychellesLeaks be needed to recover?

Therefore, the PTB will clearly vote against this convention. We did not have the opportunity to oppose this in the Walloon Region, because we had not yet elected.

Mr. Speaker, I would also like to say a few words, but without repeating what has been discussed in the committee.

First, we will ratify this treaty with the Seychelles because it involves an evolution for the Seychelles. The exchange of information is possible, and our draft also contains a number of specific provisions on anti-abuse actions by the tax administrations.

I am surprised that criticism about the Seychelles is accompanied by the willingness not to advance in a mechanism that not only integrates the Seychelles into the international order, but above all allows our administrations to benefit from exchanges of banking information and to implement anti-abuse provisions.

I would like, even if Mr. Germany is no longer there to answer its question regarding a possible additional protocol. This is not excluded. If necessary, we can go to an additional protocol to automatically make this exchange in texts. In this context, I will return to the commitments made by the Seychelles in this regard.

I am a little more surprised to hear Mr. Van Hees, who generally explains that he is very precise in tax matters, repeatedly uses the term tax paradise by referring to the execution order of article 203, § 1, of the 1992 Income Tax Code. Nothing else in this text refers to it. It simply refers to not granting an exemption for income finally taxed when the corporate tax is less than 15%. Do not confuse, especially since the text submitted to you follows the same logic, since, on the basis of Article 27 of the Treaty, in the anti-abuse measures, any benefit from the system established for operators who pay less than 15 % and whose primary objective is a tax advantage and not a real activity in the country is excluded.

This is the first set of comments that I want to make. I believe that by moving forward on this text, we are trying to take steps to integrate relations with the Seychelles into the international order, but above all to fight more effectively, through anti-abuse measures, against the fraud mechanisms that could be put in place.

I will return to the commitments made by the Seychelles. I am surprised that there is a reference to many previous documents. The Seychelles, like 84 other states, I said in a commission, have signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. In addition, since September 2014, Seychelles have undertaken to carry out an automatic exchange of information relating to banking institutions. So there is an evolution and a number of commitments have been made.

For the rest, I will obviously not judge the quality of the work performed at other levels of power, Mr. Speaker. This is not our role.

I listened closely to Mr Van der Maelen’s comment on the Flemish Parliament. I have never made such a comment myself. It is not my job to be so critical of the group of my own party in another parliament.

I must repeat that the first part of the text was signed in 2000. As then Minister of Finance, I know this. Then an additional protocol was drawn up, even when I was Minister of Finance. I know the reasoning. This text has passed through various governments, including governments whose parties were part of which now give so much criticism to this text.

In the Flemish Region, the decree dated 7 June 2013. In the Region of Wallonia, the decree dated March 13, 2014. For the Brussels-Capital Region, the date is 27 March 2014. I agree that besides Mr. Van Hees, to whom I can’t say that his party was part of the federal government – fortunately! – neither of the majorities nor of the regional assemblies, all the other stakeholders belong to political formations which, regardless of the contorsions carried out in the session, have adopted without any hesitation these texts in regional parliaments. I find it a bit surprising to hear here some accuse the government of favouring fraud while we ourselves, through our political formation, have adopted these texts in regional assemblies.

Either the fight against fraud only plays when you are in the opposition, or you have to take your part in the majority from time to time. That is what we are doing!

I urge the majority to support it. I would also like to thank CDH, because it wants to go in the same direction. After all, thanks to the text, it is possible to be more efficient in the fight against tax fraud, also in our country.

Mr. Speaker, I would like to inform you that I would rather listen to an emotional plea against the government and against the majority, and for a better fight against tax fraud, but not after a vote on the treaty in the three regions. It makes no sense.

I said this in this House fourteen days ago. You should always listen very carefully to Didier Reynders. He always brings a beautifully sounding story. He says that negotiations on this agreement began in 2006 and the negotiations on the protocol in 2009.

You, as a former Minister of Finance and all colleagues in the Committee on Finance, know that there is a wide-ranging difference in the international approach to tax fraud between the period before 2010 and the period after 2010. Dallemagne later said that the Seychelles were removed from the blacklist in 2009. That’s true, but it’s about the blacklist at the time. It was then removed from the blacklist by signing twelve double tax treaties. I mentioned the list of countries with which a double taxation treaty was concluded.

Between 2010 and now, the threshold has been raised many times by the G20, OECD and the European Commission. I cannot blame my colleagues from the Waals and Brussels Region and the Flemish Community for not following this, because this is not their competence. The plenary vote in the Flemish Parliament took place on 29 May 2013. The first time that the OECD rearranged a list using the stricter standards was in November 2013, or about six months after the vote in the Flemish Parliament.

Since 2013, the latter is much higher. This majority will deliberately continue under that higher threshold later during the vote.

We have held a debate here on whether the opposition at the federal level should consistently follow the votes cast in the regional parliaments. You can advocate this, but I will explain in a few points why we should not do this.

First, since the vote in the Flemish Parliament, the lat has been much higher.

But there is also something else.

Second, I ask MR, CD&V and Open Vld to be consistent with the vote they have cast, not in a regional parliament, but here in this House. In 2010, after a long period of work under the presidency of François-Xavier de Donnea, the committee on major tax fraud issued a recommendation which was unanimously approved by the House, except – I admit – by colleagues from the N-VA who abstained. Per ⁇ that was already a predictor of the fact that they ⁇ ’t be as fanatical if they ever had a finance minister to tackle tax fraud.

I read what was approved in 2010 by CD&V, MR and Open Vld, together with PS, Sp.a and Green. They approved that, in accordance with the OECD recommendations, no double tax treaties with tax havens will be concluded. My colleagues, I think that if a regional parliament makes a mistake and approves something wrong, I am not obliged to follow that. It is wrong to ask for consequence. However, if you want to be consistent with yourself – that committee was chaired by someone from the MR – then I ask MR, CD&V and Open Vld please vote as you did in 2010: no double tax treaties with tax havens. You only approved that five years ago, but later you will do just the opposite.

Mr. Speaker, I feel invited because I probably took part in that vote in the Flemish Parliament. I was very active there and I never knew that in the committee for Finance I served there, with among others Mr. Van Malderen as a member, someone from the sp.a made any objection to that.

I am not here in the Committee on Foreign Relations, but in the Committee on Finance, but I fully recognize, Mr. Minister of Foreign Affairs, what is being done in the Committee on Finance. Luxembourg is also a tax haven. You are not allowed to make judgments with Luxembourg. Mr. Van der Maelen has been working on this for weeks now.

The ruling committee concludes judgments with Luxembourg. Apparently it should not. That would be illegal. He wants to go to the Constitutional Court because the ruling committee would be completely illegal and would promote fraud. The same applies to the regularizations at the BBI and so on. The fraud theme occupies 80% to 85% of the time of our committee.

Now that the PS of Mr. Laaouej and the sp.a of Mr. Van der Maelen are in the opposition, any problem is linked to fraud. We are talking about the Seychelles. I was aware that there was a discussion about this, but now I fully recognize your discourse, Mr. Van der Maelen.

Does that mean that we should not cooperate with Luxembourg in any way? We now have an exchange of information. We have heard the ruling committee. Ms. Tai gave a full explanation on the discussion of 2002 and on the new OECD directive, when one is compliant or non-compliant and when that is decided. As the Minister said, there is an evolution. They are trying to become more and more clear. I fully recognize what the Minister has put forward.

Mr. Van der Maelen, you are waging a passionate struggle to give the impression that the Belgian government, since the socialists ceased to rule, is fully engaged in promoting fraud internationally. Mr. Van Hees even gives the MR the bank account, so that money can be deposited via the Internet. That Mr. Van Hees says that, I understand, it is his corebusiness. But, Mr. Van der Maelen, since you are in the opposition for a few months, you want to be the great white knight against tax fraud, while you have been in power for 25 years. You have been in power since 1988, with the exception of two years.

Mr Laououej, your party as well. Was your party also in the government? You have supported Mr. Reynders for years when he was Minister of Finance. Even my party was more critical of him than the PS. Now you come here to us the lesson games following this treaty with the Seychelles and you want to give the impression that this government and the current majority in this Parliament are in a kind of international fraud conspiracy. That Mr. Van Hees says that, I understand, but Mr. Van der Maelen, you will fully exploit your role.

I listened attentively to the debate. I fully understand what is happening in the Finance Committee. You are totally unbelievable!

Dear colleague Eric Van Rompuy, you just said that you recognize the strategy of the sp.a or the strategy of Van der Maelen. For the last few weeks and months, you said. Well, you are totally wrong, but I can’t blame you for that, because you weren’t in the Room at the time. In 2007, I made a report for the Chamber — I can give you that — on the approach to tax havens. So I prepared that report when I was still part of the majority. I then formulated a number of concrete proposals for the Minister of Finance, but those proposals were not followed by the Minister. The current Minister of Foreign Affairs, then Minister of Finance, has never made the approach to international fraud his biggest concern. I have addressed him on this subject from the majority several times, I would say in the style of Van Rompuy.

Then, colleague Van Rompuy, you talked about the rulings. I will provide you with the report of the meeting at which Mrs. Véronique Tai, chairman of the decision-making committee, came to the Committee on Finance in 2011. I was also in the majority. I then told the chairman of the ruling committee that I would never believe that Belgium would get away with the excess profit rulings it was delivering.

I repeated this at the beginning of this year and I still know that you laughed at it, along with other members of the majority. He is there again, you thought. Only fourteen days later, Belgium was urged by the European Commission to stop doing so and all information was requested to be investigated. The European Commission does not make such a thing public until it is almost certain that something is wrong.

Anyone who knows something of that matter — and you belong to it, but I think you are bad faith — knows that one does not get away with such things. So now please don’t say that we’re crying out of our neck as fourteen days after we last said that, the European Commission chooses our side.

The (...)

I will end my speech. I did not interrupt you either. You can replicate later.

And then for Luxembourg. How dare you say that? You know very well that I have held my very first interpellation on this issue in your committee. There is a 2010 law by a member of your party, Mr. Carl Devlies, which stipulates that if a country is deemed to be non-compliant by the OECD, the Minister of Finance must send a letter of circulation informing all Belgian companies and companies that if they generate more than EUR 100 000 in sales annually with Luxembourg companies, they must report it to the tax authority. That is a law made by a member of your party, approved by the House of Representatives, but the Minister of Finance refuses to enforce it through a letter. I submitted a motion of recommendation. You have pushed it all away.

Now you say that we are not talking about Luxembourg, because Luxembourg, along with the Seychelles, is also on the list. I am very excited to hear this out of your mouth, Mr. Chairman of the Committee.

Mr. Van der Maelen, I invite you to continue the discussion in the Committee on Finance. However, you are talking about the past.

Mrs. Temmerman, when was the system of excess profit rulings voted? In 2004, when CD&V was in the opposition. This is one of your initiatives. I have never heard criticism about it. Now there is a complaint to the European Commission. In the meantime, the Minister of Finance no longer makes excess profit rulings. They are held on hold. There is a complaint about state aid.

Last week, the TAXE Committee of the European Parliament hosted us. Next week we go there. There is, of course, an evolution on the international level and Belgium is prepared to adapt to it, if there is European regulation that prohibits excess profit rulings. However, we act fully in line with what is happening at the European level. If we are stricter there, we will adjust to it.

However, what disturbs me, Mr. Van der Maelen, is that you give the impression that the government and Parliament are stimulating fraud, that we want to open the offshore centers to invest there, that we encourage multinationals to have their profits taxed where the least possible needs to be paid.

Yesterday we heard about the CCCTB, the Common Consolidated Corporate Tax Base, with a minimum tax and so on. The European Commission is working on a lot of initiatives and Belgium is even willing to go beyond other countries. I invite you to come with us to the European Parliament on 17 June to confront the Belgian policy in this matter with what is happening in other European countries. If initiatives are taken at the European level, Belgium will surely adapt its legislation to that.

You give the impression that, for example, the excess profit rulings are an invention of this government. You have approved that, as well as the notional interest. The system of excess profit rulings was approved by the Flemish socialists in 2004, with Minister Reynders and a purple government, while we were in the opposition at the time. Now you are drawn up with arguments that are really drawn out of the pot.

I expected that you would take into account a certain continuity, you have been here for so many years, and we can still confront you with your past. To get back to the starting point, I did not hear any Socialist in the Flemish Parliament in the Finance Committee in 2013 criticize the treaty with the Seychelles.

Mr. Speaker, I regret to say to Mr. Van Rompuy, who then served in the Flemish Parliament and I did not, that those treaty texts were not discussed in the Committee on Finance but in the Committee on Foreign Relations of the Flemish Parliament, under the presidency of Mr. Creyelman. Without any discussion, except for a one-page introduction by the Minister, 28 treaties were approved during that one meeting, including one concerning the Seychelles. I don’t know the beginning and end time of that meeting, but I don’t think it lasted more than an hour. They had to vote 28 times.

Mr Van Rompuy, I now address you as Chairman of the Committee on Finance: I announce you that I will soon take an initiative.

That initiative is very simple: we take the last ten double tax treaties that Belgium has concluded and we ask the Court of Auditors, an independent institution that has a professional secret, to calculate the impact of those ten double tax treaties on Belgian tax revenues. We will do that and then we will see if what I stated later in the speech is true, namely that the only effect of this double taxation treaty in practice will be that companies based in Belgium with foreign activities will most likely install a facility in the Seychelles and there will collect all their profits that they get from all over the world.

Afterwards, when you were not here, I said that the Seychelles tax system provides that foreign income in the Seychelles is not taxed. The tax is zero. So they will bring all their profits there tax-free and then they will transfer them to Belgium. I will not be too technical, but either they will pay zero percent or fifty percent of the ordinary corporate tax rate. That I claim. Are you a man of your word? We will no longer talk about the past, but about the future. Well, I will present a resolution to calculate the profits we lose from the ten double tax treaties. Then we will see if you are right or if I am right.

Mr. Speaker, first of all, I would like to remind you that this Treaty contains two elements: an element relating to the exchange of information, which is rather positive, although it does not comply with the latest standard in force for automatic exchange, and the dimension of non-double taxation. The latter is problematic.

Secondly, a new element came in, namely the OECD’s latest assessment in February 2015 at a meeting in Istanbul and all the information we have, thanks to journalists, about LuxLeaks and other fraud mechanisms internationally.

Third, there is an anti-abuse clause in this text that can be considered positive as long as it is effective. To do this, it must be achieved. We could have discussed this in the committee. It is less efficient than other countries, ⁇ the United States, expect, but it also requires tax cooperation from the country with which we have agreed. This is the problem pointed out by the OECD with these International Business Companies, which are widely advertised on the internet and are used by the Seychelles to organize opacity.

Fourth, some companies are actually active in the Seychelles. I fear that, depending on their interests and demands, a mechanism is being created that far surpasses them, while it was possible to respond differently to their legitimate concern not to pay tax twice and to create a new platform for tax evasion.

Fifth, I think it is necessary to assess all of the non-double tax treaties we have signed in the light of international fraud practices. Do they not promote tax evasion and financial loss for our state? Can there be other methods to avoid double taxation?

This is under consideration in the Netherlands. I urge you to be attentive to what is happening. There is a systematic assessment of these agreements, sometimes questioning and the adoption of internal tax rules that thus do not require the granting of advantages to countries that do not practice correctly in tax terms, as is the case based on the latest information from the Seychelles.

In response to Mr. Reynders, the Royal Execution Decree of the Income Tax Code does not use the term "tax havens" but you can open any book, you will see that everyone mentions that this is the list of tax havens. I know you like to play with words. You are demonstrating it once again.

Furthermore, what I find quite incredible is that, among all those who have defended this convention, nobody speaks of the reality of the Seychelles, namely how the Seychelles play the role of an effective tax haven today with billions of capital, with fictitious companies by thousands. This is the reality. This is a reality that you prefer not to talk about.

Finally, Mr. Reynders, it is not surprising that you ended up supporting a convention with a tax haven because, yourself, you have contributed by your policy as Minister of Finance – you were not the only one – to make Belgium a tax haven too, with notional interests, excess profits and other measures.

In the end, I take this agreement somewhat as a convention between two tax havens, the Seychelles and Belgium. I know that the majority will vote for this convention but you will not win it in the "tax paradise", of course!

Mr. Speaker, briefly, after hearing the Minister and our excellent colleague, Mr. From Germany, our group is all the more comforted to vote on this bill. If I asked to be able to respond, it was also to highlight two points.

On the one hand, I appreciate the humour very much but I must say that I did not much appreciate the ironic ad hominem criticism from Mr. by Van Hees. I think this is not done. I think he got out of his role. It is so.

On the other hand, Mr. Speaker, dear colleagues, the former Wallonian MP I am looking forward to the way the work was organized in the Wallonian Parliament where we had a real debate. Everyone was able to speak. I am really surprised by what I heard from the Flemish Parliament from our colleague.

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