| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2016) 23 final (28.1.16) |
| Publication Date | 28/01/2016 |
| Content Type | Policy-making, Report |
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The Single Market is one of Europe’s greatest achievements, designed to allow people, goods, services and capital to move freely. It reduces red tape for professionals and businesses operating cross border. It provides greater choice and lower prices for consumers. It enables people to travel, live, work and study wherever they wish. The Commission has therefore made it a priority to develop a deeper and fairer Internal Market, which is fundamental to delivering a thriving economy that benefits all. As set out in the June 2015 Action Plan for a Fair and Efficient Corporate Tax System in the EU, a healthy Single Market needs a fair, efficient and growth-friendly corporate tax system, based on the principle that companies should pay taxes in the country where profits are generated. Aggressive Tax Planning undermines this principle. The majority of businesses do not engage in aggressive tax planning and suffer a competitive disadvantage to those that do. The aggressive behaviour of these companies distorts price signals and allows them to enjoy lower capital costs, disrupting the level playing field in the Single Market. Small and medium sized businesses are particularly affected by this phenomenon. Meanwhile, Member States suffer significant revenue losses due to this aggressive tax planning by certain companies. Other less aggressive, less mobile taxpayers then have to carry a heavier burden. As Europe emerges from a difficult economic crisis, citizens understandably resent having to carry a heavier tax burden while certain corporations avoid paying their fair share, with sometimes the voluntary or involuntary complicity of national governments. This uneven burden-sharing erodes fairness in taxation, reduces general tax-payer morale and threatens the social contract between citizens and their governments. The European Parliament, voicing the concerns of European citizens, has demanded that these practices should stop. Member States agree and understand that if they want a stronger Single Market then taxation cannot be left aside. A coordinated approach to implementing growth-friendly tax systems and tackling cross-border problems is essential for a well-functioning Single Market, a successful Capital Markets Union and to attract inward investment to the EU. Member States, now, acknowledge this and have called for an end to aggressive tax planning. This requires a common approach at EU level or the introduction of general and specific anti-tax avoidance provisions in the Union, covering both internal measures and common actions against external base erosion threats. |
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| Source Link | http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2016:023:FIN |
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| Subject Categories | Taxation |
| Countries / Regions | Europe |
