EU: Initiatives on corporate tax avoidance, scheduled for 27 January

Corporate tax avoidance initiatives in EU

The European Commission today announced that it plans to launch an additional package of initiatives to address corporate tax avoidance within the EU and throughout the world. The proposals will be based on the principle that all companies must pay tax where they make their profits. The package will be presented on 27 January 2016 and will set out a coordinated EU-wide approach for implementing good tax governance standards internationally.

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In connection with an EC release today, finding that a Belgian tax regime was illegal state aid, the EC noted that since 2013, it has been investigating the tax ruling practices of EU Member States and extended this information inquiry to all EU Member States in December 2014. In October 2015, the EC found Luxembourg and the Netherlands granted selective tax advantages to two multinational entities, and the EC has three ongoing in-depth investigations—concerning Ireland and Luxembourg—as to whether tax rulings may give rise to state aid issues.

Tax evasion and tax fraud are reported to be top priorities of the EC. The EU Member States in October 2015 reached a political agreement on automatic exchange of information on tax rulings. In June 2015, the EU unveiled a series of initiatives and among the actions is a framework for effective taxation of profits at the place where they are generated and a strategy to re-launch the Common Consolidated Corporate Tax Base (CCCTB).

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