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Almunia To Tackle Tax From 'State Aid Point Of View'

by Ulrika Lomas, Tax-News.com, Brussels

14 February 2014


The fairness and integrity of national tax systems is undermined by gaps in legislation, the European Union's (EU) Competition Commissioner has claimed.

Speaking at the European Competition Forum, Joaquín Almunia pointed out that large multinational companies are able to pay "very low taxes" without breaking the law. This situation is "socially untenable," he added, because governments are increasingly unable to "ask ordinary citizens to accept adjustments and pay their fair share of taxes if big companies don't."

If Europe hopes to effectively tackle these issues, it must do so from "the State aid standpoint." Almunia told the Forum that "selective taxation is economically inefficient, because it distorts the level playing field for the allocation of capital within the internal market." There are also more opportunities for companies engaged in the digital and creative sectors to "push activities from one country to another and take advantage of the gaps that exist within the EU."

Aggressive tax planning is therefore "contrary to the principles of the Single Market." He intends to "get to the bottom" of the "State aid component" of the issue, whereby "national laws or tax-administration decisions permit or encourage these practices."

TAGS: compliance | tax | tax compliance | tax avoidance | tax incentives | law | legislation | tax planning | transfer pricing | tax reform | European Union (EU) | Europe | Tax | Tax Evasion

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