TaxCorporate TaxTreasury urged to review avoidance rules

Treasury urged to review avoidance rules

European Commission tells member states to look again at whether they are restricting the single market

The Treasury has been urged to review anti-avoidance rules by the European
Commission.

In a crackdown on tax avoidance legislation,
László
Kovács urged member states
to review what structures they have in place to
ensure they are not restricting the single market.

Kovács, the commissioner responsible for taxation and customs union, said:
‘The recent rulings by the European Court of Justice in this field clearly show
that Member States need to urgently carry out a critical review of their
existing anti-abuse rules. I understand that member states need to ensure that
their tax bases are not unduly eroded because of abusive and overtly aggressive
tax planning schemes but we cannot tolerate disproportionate obstacles to
cross-border activity within the EU. I invite member states, in order to strike
the proper balance, together to explore the potential and scope for possible
coordinated solutions’

Many UK corporate tax rules have been challenged by companies, who say they
restrict freedom of establishment and the free movement of capital.

Challenges
have been brought
over the ‘thin cap’ rules, as well as on controlled
foreign companies legislation.

The rules are designed to stop companies situating profits in countries with
low tax rates, but companies contend that such structures run contrary to the
aims of the European single market.

Further Reading:

Read
the EC’s announcement

European
influence: the EU fire fight

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

1m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

3m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

4m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

7m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

8m Alia Shoaib, Reporter