EU: Corporate tax-avoidance package (BEPS) | KPMG | GLOBAL

EU: Corporate tax-avoidance package (BEPS) endorsed by G20 ministers

EU: Corporate tax-avoidance package (BEPS)

The EU Tax Commissioner welcomed a package of measures to address international corporate tax avoidance, endorsed today by the G20 Finance Ministers at a meeting in Cairns, Australia.


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The G20 ministers agreed on a first set of recommendations to address key areas in the OECD's action plan on base erosion and profit shifting (BEPS).

According to today’s EC release, the European Union has been actively involved in the OECD's work on the BEPS action plan, while also pushing forward its own “ambitious measures” to address tax avoidance in Europe.


The reports and recommendations agreed to by G20 Finance Ministers today present a number of solutions for addressing international tax avoidance, including:

  • Measures against particular forms of “aggressive” tax planning (hybrid mismatch arrangements)
  • Steps to prevent tax treaty abuses
  • Revisions to international transfer pricing rules

Other issues—such as tackling harmful tax practices linked to intellectual property regimes (e.g. patent boxes) and tax rulings, will be developed over the coming year, as well as provisions concerning taxation of the digital economy.

EU level actions

At EU level, provisions to address corporate tax avoidance over the past year include:

  • Revising EU corporate tax rules: The revision of the Parent-Subsidiary Directive is intended to prevent companies from using mismatches in national tax regimes to evade taxes. EU Member States agreed on the measures to counter certain abusive tax practices (hybrid mismatches) in July 2014, and are expected to reach an agreement on the anti-abuse provisions (i.e., taxation is based on actual economic activity) before the end of the year.
  • Addressing digital taxation: The EC established an independent “high level” expert group to examine the challenges and solutions to taxing the digital economy, and the group's report, presented in May 2014, will help guide future initiatives in this area at EU level.
  • Tackling harmful tax regimes: The EC has completed certain investigations into tax rulings and/or scrutinized patent boxes under the Code of Conduct on Harmful Business Taxation.

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