EC unveils fresh tax anti-avoidance plans

THE European Commission has unveiled an amended blueprint for the single market tax system that will close tax avoidance loopholes but also treat debt and equity financing more equally, the commission said.

The relaunched Common Consolidated Corporate Tax Base (CCCTB) aims to deter multinationals from setting up complex structures within the European Union to reduce their tax liability – by making it easier and cheaper to do business in the single market.

Two proposals aim to improve the current system for dispute resolution on double taxation in the EU and to shore up anti-abuse rules. “These measures will create a simple and pro-business tax environment”, a statement from the EC said.

Among other points, the CCCTB will create a single rulebook for calculating taxable profits throughout the EU, tackle loopholes that allow profit-shifting for tax purposes, encourage equity rather than debt financing

Many of the points the EC is announcing today form part of the package of anti-avoidance proposals created by the OECD’s base erosion and profit sharing project (BEPS), which hundreds of countries around the world, including the UK and the US, have either already implemented or plan to do so.

Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, said:”With the rebooted CCCTB proposal, we’re addressing the concerns of both businesses and citizens in one fell swoop. The many conversations I’ve had as taxation commissioner have made it crystal-clear to me that companies need simpler tax rules within the EU.

“At the same time, we need to drive forward our fight against tax avoidance, which is delivering real change. Finance ministers should look at this ambitious and timely package with a fresh pair of eyes because it will create a robust tax system fit for the 21st century.”

Corporate tax rates will remain an area of national sovereignty for EU member states.