EU Releases Corporate Tax Reform Action Plan

Ulrika Lomas, Tax-News.com, Brussels

18 June, 2015

The European Commission has presented an Action Plan setting out a series of initiatives to tackle tax avoidance, secure sustainable revenues, and strengthen the Single Market for businesses.

The Action Plan, which was released on June 17, 2015, includes a strategy to re-launch the Common Consolidated Corporate Tax Base (CCCTB) and a framework to ensure effective taxation where profits are generated.

The Commission said: "The CCCTB can deliver on all fronts, significantly improving the Single Market for businesses, while also closing off opportunities for corporate tax avoidance. Negotiations are currently stalled on the Commission's 2011 proposal for a CCCTB. However, there is a general consensus that they need to be revived, given the major benefits that the CCCTB offers."

Work will begin immediately on a new proposal to introduce a mandatory CCCTB through a step-by-step approach. The Commission said: "This will allow member states to progress more quickly on securing the common taxable base. Consolidation will be introduced as a second step, as this has been the most difficult element in negotiations so far. The Commission will present this new proposal as early as possible in 2016."

The Action Plan also includes the first pan-EU list of third-country deemed to be non-cooperative tax jurisdictions. The Commission has also launched a public consultation to gather feedback on whether companies should have to publicly disclose certain tax information, including through Country-by-Country Reporting (CbCR).

The Action Plan represents a second, more comprehensive step towards reforming corporate taxation in the EU. As a first step, the Commission proposed a Tax Transparency Package, in March 2015, to enhance cooperation between member states on corporate tax issues. A key element in the Package was a proposal for the automatic exchange of information on tax rulings.

Welcoming the release of the Action Plan, OECD Secretary-General Angel Gurría said: "The Commission's initiative is another major step towards international co-operation in the fight against tax evasion and avoidance...Initiatives like the Commission's Action Plan will help foster a co-ordinated implementation of the measures developed in the course of the BEPS project. A globalized economy needs single global standards."

TAGS: tax | business | European Commission | tax avoidance | Organisation for Economic Co-operation and Development (OECD) | corporation tax | tax authority | multinationals | tax planning | transfer pricing | tax reform | standards | European Union (EU) | Europe | Tax | Tax Evasion |




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