THE European Commission has proposed new rules to restrict companies shifting their profits to low tax jurisdictions as part of a package of measures aimed at curbing multinational companies’ aggressive tax practices.
It calls on member states to take a stronger and more coordinated stance against tax avoidance and suggests that tax authorities share tax-related information on multinationals operating in the EU, as earlier agreed by 31 countries in a deal with the OECD.
Other proposals include a series of legally legally-binding measures to block the most common methods used by companies to avoid paying tax, while the EC is expected to consider imposing a so-called Common Consolidated Corporate Tax Base (CCCTB) across the EU.
The measures, which build on the OECD Base Erosion and Profit Shifting project, will require the support of all 28 EU member states to become law.
Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, said: ” Today we are taking a major step towards creating a level-playing field for all our businesses, for fair and effective taxation for all Europeans.”
The proposals come as the influential UK Treasury Committee launched an inquiry into the country’s corporate tax system, after the government was criticised over the ‘derisory’ nature of its tax settlement with Google.
Although not aimed at Google, MPs will consider broader measures to protect the UK’s shrinking corporate tax base and look at HMRC measures to tackle aggressive tax avoidance.
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Signed into law by president Barack Obama in 2010, the Dodd-Frank legislation has tightened regulation of the US financial system
Just when SMEs thought they knew the lie of the land in terms of the Brexit timescale, Theresa May has caught them by surprise. Salvador Amico of Menzies asks how SMEs should react to the news of a snap election on 8 June