EU: Aggressive tax planning | KPMG | BE
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EU: Aggressive tax planning; focus on interest, royalties, transfer pricing

EU: Aggressive tax planning

The European Commission today released a final version of a report that examines economic evidence of the relevance of aggressive tax planning structures for all EU Member States.

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The report—Aggressive tax planning indicators (final report) [3.42 MB]—provides (in 189 pages) a broad picture of which EU Member States appear to be exposed to aggressive tax planning structures, and how those may affect their tax base (erosion or increase).

The aggressive tax planning structures are grouped into three areas:

  • Aggressive tax planning via interest payments
  • Aggressive tax planning via royalty payments
  • Aggressive tax planning via strategic transfer pricing

In combination, these indicators are used to examine multinational enterprise (MNE) structures under one of three types: (1) target entities, when the tax base is reduced; (2) the lower tax entities when the tax base is increased but taxed at a lower rate; and (3) conduit entities which are in a group with aggressive tax planning activities but no clear effect on the tax base is observable.

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