Cyprus Mail

EU to step up tax avoidance fight with plan for common tax base – Moscovici

The European Commission will step up its campaign against corporate tax avoidance with proposals in the coming weeks on a common tax base for multinationals operating in the European Union, the commissioner for economic affairs said on Friday.

Brussels has been seeking for some time to toughen up its approach, in part to ward off the threat of eurosceptics who could pull the EU apart if it fails to show alienated voters it can act in their interests.

The recent shock multi-billion euro tax demand on Apple was part of that trend.

The 28 EU countries apply a wide range of tax exemptions and deductions to companies, making it difficult for corporations operating in more than one country to calculate their tax base, which is the amount of net profits subject to taxation.

The bloc’s complex tax system also allows companies with bigger accounting departments to exploit the differences between countries and reduce their final bill.

To close this loophole, the Commission will propose in the coming weeks a single system of tax deductions, such as for wages or other costs, for all the 28 countries. States will maintain the power to decide tax rates.

“I will relaunch this semester a plan for a CCCTB (Common Consolidated Corporate Tax Base),” the EU commissioner for economic and tax affairs Pierre Moscovici told reporters on his arrival to an informal meeting of EU finance ministers in Bratislava, which will address tax issues.

A proposal on CCCTB is on the Commission’s agenda for a meeting on Nov 9, an EU executive document shows.

An initial attempt by the Commission in 2011 to set up a CCCTB failed as member states could not agree on the proposal, for which a unanimous consensus is needed.

The outcry caused by revelations on tax avoidance schemes used by multinationals and rich individuals to cut their tax bills, such as the Panama Papers or the so-called LuxLeaks, have emboldened the Commission and increased support for anti-tax dodging measures in several member states, including the largest of the bloc.

“The politics of reducing the excessive use of diverse tax regulations is a common policy, which we in Europe are pushing for with energy,” German Finance Minister Wolfgang Schaeuble said.

But some smaller countries may remain reluctant to changes.

“There was a proposal on a common consolidated tax base some years ago and got very little traction among members,” Irish Finance Minister Michael Noonan said before the meeting.

“Commissioner Moscovici said he was withdrawing the paper but he would come back with a new paper based on the areas on where it seems to be emerging consensus. We are awaiting that paper,” Noonan added.

Ireland has decided to appeal against a €13bn back tax demand that the European Commission imposed on Apple in August, fearing it could undermine the country’s long-established policy of attracting multinationals with low taxes.

Moscovici also said that in the coming days the Commission will present to member states a “scoreboard” on foreign countries’ tax regimes with the aim to set up an EU blacklist of tax havens which may be subject to sanctions.

Related posts

Large blast in Beirut port area rocks Lebanon’s capital, many people hurt (updated)

Reuters News Service

Israeli leaders locked in budget battle as economic crisis deepens

Reuters News Service

Europe air safety regulator gives no firm date for 737 MAX return

Reuters News Service

UK risks twice-as-big second COVID wave without better testing, study finds

Reuters News Service

Greece sees fewer migrant arrivals from Turkey, partly due to pandemic, minister says

Reuters News Service

Heavy rains in S.Korea displace more than 1,000 people, 13 dead

Reuters News Service