EU Tax Commissioner Algirdas Šemeta
has welcomed the package of measures to tackle international corporate
tax avoidance, which was endorsed today by the G20 Finance Ministers in
Cairns, Australia. The Ministers agreed on a first set of
recommendations to address key areas in the OECD's Action Plan on Base
Erosion and Profit Shifting (BEPS) which, once implemented, should
ensure fairer taxation and fairer competition globally. The EU has been
actively involved in the OECD's work on the BEPS Action Plan, while also
pushing forward its own ambitious measures to fight tax avoidance in
Europe.
"The
initiatives agreed at the G20 today are an important advance in creating
a fairer, more appropriate corporate tax environment worldwide. They
will thwart many of the aggressive tax practices that companies engage
in today, and ensure a more level playing-field for businesses
internationally. They will ensure that countries work together to
protect tax bases, rather than tug against each other to the benefit of
corporate tax dodgers." Commissioner Šemeta said.
"However, today's commitments are just
a first step – albeit an important one. There are many other important
issues to be addressed before we have delivered upon the BEPS Action
Plan. I would urge our international partners, together with the OECD,
to keep their eye on the goal so that we meet the 2015 deadline
foreseen. For our part, the EU will continue to be an active and
constructive partner in the BEPS project, and will push for its swift
and successful completion. The EU has always been the flag-bearer in the
fight against tax avoidance, and we will continue to lead by example,
in Europe and worldwide."
Background...
The reports and recommendations agreed
by G20 Finance Ministers today present a number of important solutions
to the problem of international tax avoidance. These include measures
against particular forms of aggressive tax planning (hybrid mismatch
arrangements), steps to prevent tax treaty abuses and necessary
revisions to international transfer pricing rules. Other crucial issues,
such as tackling harmful tax practices linked to Intellectual Property
regimes (e.g. Patent Boxes) and tax rulings, will be developed over the
coming year. Answers to the challenges of taxing the digital economy
also need to be found.
At EU level, major steps have been
taken to clamp down on corporate tax avoidance, which are both
consistent with, and set the pace for, the international work in this
area.
Over the past year alone, measures have included:
- Revising EU corporate tax rules: The revision of the Parent-Subsidiary Directive (see IP/13/1149)
will prevent companies using mismatches in national tax regimes to
evade taxes. Member States agreed on the measures to counter certain
abusive tax practices (hybrid mismatches) in July 2014, and should agree
on the anti-abuse provisions (to ensure taxation is based on actual
economic activity) before the end of the year.
- Addressing Digital Taxation:
The Commission established an independent High Level Expert Group to
examine the challenges and solutions to taxing the digital economy. The
Group's report, presented in May 2014, will help guide future
initiatives in this area at EU level (see IP/14/604).
- Tackling harmful tax regimes: Whether through competition investigations into tax rulings (see IP/14/663)
or scrutiny of Patent Boxes under the Code of Conduct on Harmful
Business Taxation, the Commission has used every tool at its disposal to
counter harmful tax regimes in Member States.
Useful links
For the fight against tax fraud and tax evasion at EU level, see:
