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Austrian EU Presidency To Prioritize Anti-Tax Evasion Work

by Ulrika Lomas, Tax-News.com, Brussels

01 August 2017


Austrian Finance Minister Hans Joerg Schelling has said that Austria should prioritize measures to combat profit shifting and tax evasion, including "virtual permanent establishments," when the country assumes the presidency of the European Union in the second half of 2018.

In a statement released following his meeting with French Finance Minister Bruno Le Maire on July 30, Schelling said that he "wants to put a special focus on European and international measures to prevent profit shifting and international tax fraud."

"In recent years Austria has implemented numerous measures on the national level. In this regard we have always been pioneers. But to tackle tax avoidance and tax fraud more effectively, we need solutions on a European and International level," he stated.

Schelling said that he has already discussed the outlines of a plan with European Tax Commissioner Pierre Moscovici which includes proposals for a common corporate tax base, "virtual" permanent establishments, and the charging of value-added tax on all mail order sales.

The concept of a virtual permanent establishment has been discussed as part of the OECD's work on base erosion and profit shifting, and would create new concept of permanent establishment for digital companies which generate substantial levels of sales in a jurisdiction, but which are not considered to have a taxable presence there under the traditional definition of a permanent establishment.

"With respect to virtual permanent establishments, the aim is to record the profits and sales of internet companies, including those with an online presence but no physical permanent establishments in Austria. The sales generated in our country would be a possible point of reference in this case," Schelling's statement explained.

Schelling added that Austria will develop detailed recommendations for virtual permanent establishments and present them to both the EU and the OECD.

The six-month rotating presidency of the EU is currently held by Estonia, with Bulgaria due to assume the role for the first half of 2018.

TAGS: Finance | tax | tax avoidance | Bulgaria | Estonia | Austria | Europe | Tax

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