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MEPs Task EC To Table Corporate Tax Measures

by Lorys Charalambous,, Cyprus

02 December 2015

Members of the European Parliament have tasked the EU Commission to table measures to improve corporate tax transparency, coordination, and EU-wide policy convergence, in legislative recommendations passed by the Economic and Monetary Affairs Committee on December 1, 2015.

The recommendations build on the work of EU Parliament's Special Committee on Tax Rulings, set up in the wake of the "Luxleaks" revelations, whose recommendations were approved at the November 26 plenary session.

In particular, the Commission has been asked to improve the transfer pricing framework in the EU; come up with common definitions for "permanent establishment" and "economic substance" so as to ensure that profits are taxed where value is generated; provide guidelines regarding "patent boxes" so as to ensure they are not harmful; and come up with an EU definition of "tax haven" and counter-measures for those who use them.

The Commission has also been asked to table a proposal for country-by-country reporting on profit, tax, and subsidies by June 2016; introduce a Common Tax Base (a CCTB) as a first step, which later on should be consolidated as well (a CCCTB); improve cross-border taxation dispute resolution mechanisms; and strengthen the mandate of, and improve transparency surrounding the work of the Code of Conduct Working Group on Business Taxation.

The Committee resolution will be put to a vote by a parliamentary plenary on December 16. If it is approved, the Commission will have three months to respond to the recommendations, either with a legislative proposal, or with an explanation for not doing so.

TAGS: tax | investment | business | European Commission | tax avoidance | law | accounting | audit | enforcement | tax authority | agreements | multinationals | legislation | tax planning | transfer pricing | tax reform | regulation | legislation amendments | trade | European Union (EU) | Europe | Work | Tax | BEPS

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