EU relaunches common tax rules
Print Edition
THE European Commission yesterday relaunched plans to introduce common tax rules for multinationals, saying that public anger over tax avoidance and a new approach should win over EU member states that blocked the idea four years ago.
The commission, the European Union’s executive, said it wanted a common consolidated corporate tax base (CCCTB) to prevent “aggressive” tax planning measures such as artificially shifting profits to the country where rates are lowest.
“What we are doing is part of a trend,” Economic Affairs Commissioner Pierre Moscovici told a news conference.
“During the crisis our citizens have had to contribute a lot. What they don’t want to see is that corporations, because they have sophisticated legal advice, can juggle between administrations.”
Corporate taxes have remained in the headlines because of the way multinationals can legally reduce their bills by basing themselves in low-tax centers. The EU is already investigating the tax arrangements of Apple, Starbucks and Amazon in some member states.
Moscovici said countries were working on the basis of tax rules drawn up in the 1930s and more recent ad-hoc decisions by individual member states, but said a common approach was needed.
A previous attempt to bring in CCCTB drew opposition from member states who saw it as a first step toward harmonizing tax rates, regarded as a sovereign issue.
Moscovici said that was not the plan, nor was it the commission’s intention to lay down a minimum corporate tax rate.
Under CCCTB, companies would use just one EU system to compute their taxable income rather than dealing with the rules in 28 different member states, saving businesses about 700 million euros (US$790 million) per year.
It would be designed to eliminate mismatches between national systems, which companies can currently exploit.
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