| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2015) 136 final (18.3.15) |
| Publication Date | 18/03/2015 |
| Content Type | Policy-making, Report |
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Fighting tax evasion is essential to securing greater fairness and economic efficiency in the Internal Market, in line with the Commission’s top political priorities. Tackling corporate tax avoidance is closely linked to this agenda. Unlike tax evasion, which is illegal, tax avoidance normally falls within the limits of the law. However, many forms of tax avoidance go against the spirit of the law, stretching the interpretation of what is "legal" as far as possible to minimise a company's overall tax contribution. Using aggressive tax planning techniques, some companies exploit legal loopholes in tax systems and mismatches between national rules to avoid paying their fair share of taxes. Moreover, tax regimes in many countries allow companies to artificially shift profits to their jurisdictions, with the effect of encouraging this aggressive tax planning. These activities undermine fair burden sharing amongst tax-payers, fair competition between businesses and fair play between Member States in collecting the tax on profits that they are rightfully due. Taxation policy is mainly set at national level. However, with a view to securing fairer taxation and upholding the principle that taxation should reflect where economic activity takes place, the Commission is intensifying efforts to help Member States to combat tax evasion and avoidance in the Internal Market. In addition to necessary efforts by Member States to simplify and streamline tax systems, tax transparency is a crucial element in meeting these goals. Aggressive tax planning, harmful tax regimes and tax fraud all rely on an environment of complexity and non-cooperation to thrive. Combatting tax evasion and avoidance therefore requires more openness between tax authorities and greater cooperation between governments. There must also be a stronger onus on companies to engage in tax practices that are transparent and fair. The EU has consistently shown leadership in good governance in tax matters and, for many years, promoted principles in this area which are now gaining traction worldwide. The recent and unprecedented momentum behind the battle against tax evasion and avoidance has been fuelled largely by the public demand for fair taxation in difficult times. This new drive to ensure that everybody pays their share is delivering considerable results, at EU and international level. The EU has actively contributed to the OECD/G20 work to revise transparency standards and tackle abusive tax practices worldwide. The BEPS project, due to be completed in 2015, should lead to a fundamental reform of the global tax environment, making it far more hostile to evaders and aggressive tax planners in the future. Despite this progress, however, further measures are needed to enable Member States to protect their tax bases and businesses to compete fairly in the Internal Market, while also ensuring due compliance with fundamental rights, including the right to personal data protection. With this in mind, the present Communication is presenting a Tax Transparency Package, focussed on the most urgent issues to be addressed in this field. This is the first step in the Commission’s ambitious agenda for 2015 to fight tax evasion and avoidance. It will be followed before the summer by a detailed Action Plan on corporate taxation, which will set out the Commission's views on fair and efficient corporate taxation in the EU and propose a number of ideas to achieve this objective, including ways to strengthen discussions in the Council and to re-launch the proposal for a Common Consolidated Corporate Tax Base (CCCTB). The CCCTB could serve as an effective tool against corporate tax avoidance in the EU, in addition to cutting costs and administrative burdens for businesses in the Internal Market. |
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| Source Link | http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2015:136:FIN |
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| Subject Categories | Taxation |
| Countries / Regions | Europe |
