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EU Announces DAC7, Review Of Corporate Tax Code Of Conduct

by Ulrika Lomas, Lowtax.net, Brussels
24 July, 2020

The European Commission has announced plans for a new Directive on Administrative Cooperation, on the exchange of information on online platforms' sales, and a new Communication on Tax Good Governance.

The new Directive on Administrative Cooperation (DAC7) will set out a framework for member states to automatically exchange the information they receive on the taxable activities of business users of online platforms.

DAC7 is intended to enable national authorities to identify situations where tax should be paid, and to reduce the administrative burden on platforms, which currently have to deal with several, different national reporting requirements. DAC7 will also clarify and improve existing rules, and will include joint tax audits and group requests.

Meanwhile, the Communication on Tax Good Governance is intended to, among other things, reform the Code of Conduct for Business Taxation, which sets the parameters of fair tax competition in the EU.

According to the Commission, the aim is to ensure that the Code can effectively tackle all forms of harmful tax competition in a more transparent manner. The Commission said that the Code needs to move to a new stage where it will not just examine specific preferential measures, but also general features of member states' corporate tax regimes that can have harmful effects.

Finally, the Commission has indicated that it is intending to review the EU's list of non-cooperative tax jurisdictions, to ensure it is still effective and fit for purpose.

The plans were outlined in the EU's Tax Action Plan, unveiled on July 15, 2020.

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