- Anti-tax-fraud package due in January, to go beyond OECD plan
- Proposals also due on country-by-country tax reporting
The European Commission will this year present proposals on corporate taxation, fighting value-added tax fraud and country-by-country rules on tax reporting.
The European Union’s executive arm will this month submit a package aimed at countering tax-avoidance and ensuring companies don’t use international loopholes to evade paying their fair share, Tax Commissioner Pierre Moscovici told a European Parliament panel Monday in Brussels. The plan will go beyond principles laid out in a Organization for Economic Cooperation and Development report on tax-base erosion and profit-shifting, he said.
“We’re going to be more specific and ambitious in our approach,” Moscovici said. He expressed hope that nations will be able to agree on the measures in the first half of this year.
Special tax deals for companies such as Apple Inc., Starbucks Corp. and Anheuser-Busch InBev NV have drawn increased scrutiny from the EU as nations look for ways to safeguard tax revenues and prevent evasion. The Brussels-based commission Monday ordered Belgium to recover about 700 million euros ($760 million) in illegal tax breaks given to at least 35 companies as regulators continued a crackdown that’s also affected the Netherlands, Luxembourg and Ireland.
Moscovici said the commission plans to introduce an anti-VAT fraud package in the next few months, and will also tackle the issue of how much tax data companies must make public. A European Parliament resolution in December urged the commission to propose tougher tax-reporting requirements on cross-border companies by June.
The EU is conducting an impact assessment on tax-reporting issues that’s planned for completion in the first quarter. Moscovici said he’ll review the study with Financial Services Commissioner Jonathan Hill and Justice Commissioner Vera Jourova to decide how to proceed.
Moscovici said he supports forcing companies to make country-by-country tax data public, in addition to sharing it automatically among the relevant authorities. At the same time, “we should not adopt any measure which should affect competitiveness of our companies compared to their foreign competitors,” so the EU will need to take account of tax rules in the U.S. and other nations, he said.
Also in 2016, the EU plans to relaunch its push for a common corporate consolidated tax base via a two-stage approach that defers consolidation to a second phase. “We haven’t yet finalized the discussion on minimum rates,” Moscovici said. “The basis that we are working in is effective taxation. No company will be in a situation where they will pay no taxes or too little in tax.”
Tax policies must usually be adopted unanimously by the 28-nation EU, although there are procedures for a smaller group of willing nations to proceed if talks fail among the full bloc. The European Parliament is limited to an advisory role on tax matters.
Moscovici said the 10 nations pursuing a financial-transactions tax should reach a deal by June. He expressed confidence that the joint tax would eventually be adopted.