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BackThis week, the Council of the Commission debated measures on the more effective taxation of cross-border operating businesses. The debate was also linked to the review of favourable tax rules for multinational companies in four Member States with regard to illegal state aid. The scheduled measures shall be implemented in several stages, whereby the first one will be taken as early as March.Following this week’s Council meeting of the Commission members, Vice President Valdis Dombrovskis explained the problem that multinational companies had developed tax avoidance measures, which were responsible for Member States losing out on important revenue.
In its Work Programme, the Commission had set itself the goal to stop such practices. The principle that would guide all future measures towards corporate taxation was that all corporate profits had to be taxed in the state, where they were generated.
Hence, the first legislative proposal on the automatic exchange of information regarding binding preliminary tax assessments shall be introduced in March. Under the current regulations, it was not possible for national tax authorities to discover where profits were actually generated. The plan is, to also prepare recommendations with regard to public tax transparency.
Since the 2011 CCCTB proposal (Common Consolidated Corporate Tax Base), the discussion on joint rules concerning a common tax base had not made any progress. The reason for this was described by the Commissioner as “sensibilities” of the Member States, which were also responsible for the blockade in the Council. The Commission will prepare new relevant proposals over the coming months; currently one would be in consultation mode. “Fair” corporate taxation too shall play a part in the second package, which will be published in summer.
In theory, Directive 77/799/EEC has been obliging Member States since 1977 to exchange tax data, which might be relevant to other Member States with regard to tax avoidance. Neither the Commission nor the authorities have paid particular attention to the Directive, because of which a special committee in the European Parliament was set up at the beginning of February.
In its Work Programme, the Commission had set itself the goal to stop such practices. The principle that would guide all future measures towards corporate taxation was that all corporate profits had to be taxed in the state, where they were generated.
Hence, the first legislative proposal on the automatic exchange of information regarding binding preliminary tax assessments shall be introduced in March. Under the current regulations, it was not possible for national tax authorities to discover where profits were actually generated. The plan is, to also prepare recommendations with regard to public tax transparency.
Since the 2011 CCCTB proposal (Common Consolidated Corporate Tax Base), the discussion on joint rules concerning a common tax base had not made any progress. The reason for this was described by the Commissioner as “sensibilities” of the Member States, which were also responsible for the blockade in the Council. The Commission will prepare new relevant proposals over the coming months; currently one would be in consultation mode. “Fair” corporate taxation too shall play a part in the second package, which will be published in summer.
In theory, Directive 77/799/EEC has been obliging Member States since 1977 to exchange tax data, which might be relevant to other Member States with regard to tax avoidance. Neither the Commission nor the authorities have paid particular attention to the Directive, because of which a special committee in the European Parliament was set up at the beginning of February.