In a further move to make tax systems fairer, more efficient, growth-friendly and transparent, the Commission presented an Action Plan to fundamentally reform corporate taxation in the EU and published a “Top 30″ list of tax havens across the world.
The Action Plan sets out a series of initiatives to tackle tax avoidance, secure sustainable revenues and strengthen the Single Market for businesses. Key actions include a strategy to re-launch the Common Consolidated Corporate Tax Base (CCCTB) and a framework to ensure effective taxation where profits are generated. The aim is also to increase transparency within the EU and vis-à-vis third countries.
Re-launching the Common Consolidated Corporate Tax Base (CCCTB)
The Commission will re-launch its proposal for a Common Consolidated Corporate Tax Base (CCCTB) in 2016, as a holistic solution to corporate tax reform. The novelty is that it will be conceived as a mandatory CCCTB, at least for multinational companies, starting with the common base, followed by consolidation as a second step. The CCCTB can deliver on all fronts, significantly improving the Single Market for businesses, while also closing off opportunities for corporate tax avoidance. The CCCTB is not about tax rates. Member States will continue to decide their own corporate tax rates, as is their sovereign right.
Ensuring Effective Taxation
The Action Plan sets out the path for effective taxation in the EU, which is the notion that companies should pay a fair share of tax in the country where they make their profits. The Commission is proposing measures to close legislative loopholes, improve the transfer pricing system and implement stricter rules for preferential tax regimes, among other things. These initiatives should also help to advance the ongoing debate between Member States to define and agree on an EU approach to effective taxation.
Increasing Transparency
The Action Plan sets out the next steps for greater tax transparency – within the EU and vis-à-vis third countries. In this context, the Commission published a “Top 30″ pan-EU list of non-cooperative tax jurisdictions across the world, which is made up of countries that are black-listed by at least 10 Member States. The aim is to have a common EU approach to defining and reacting to third country non-cooperative tax jurisdictions.
The Commission is also launching a public consultation today to gather feedback on whether companies should have to publicly disclose certain tax information, including through Country-by-Country Reporting (CbCR). The consultation, together with the Commission’s ongoing impact assessment work, will help to shape any future policy decisions on this issue.
At its weekly College meeting the Commission has also decided to set up a new service in charge of helping Member States implement growth-enhancing reforms. It will be called “Structural Reform Support Service” and will specialise in technical assistance for Member States for the implementation of growth-enhancing administrative and structural reforms. The new service will draw on the valuable experience and know-how of the Task Force for Greece and the Support Group for Cyprus, which will be integrated in it. The main benefit for Member States is that any member State can ask for support from the new group, not just programme countries.