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.
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government
Kevin Reed discusses the worrying findings from HMRC on micro-businesses' problems handling Real-Time Information, and the latest thoughts on how accountants can provide value-added services