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European Commission Announces Action Plan for Corporate Taxation in the EU — Orbitax Tax News & Alerts

On 17 June 2015, the European Commission issued a press release announcing its Action Plan to reform corporate taxation in the EU. The plan includes five main actions:

1. Re-launching the Common Consolidated Corporate Tax Base (CCCTB)

The CCCTB would provide the best solution within the EU to the problem of aggressive tax planning.  The Action Plan therefore sets out a step-by-step approach to the CCCTB, which will provide fresh momentum to this proposal.

2. Ensuring fair taxation where profits are generated

Profits should be taxed where the value is generated. The Action Plan sets out how the Commission will work with Member States to ensure that companies active in the EU are effectively taxed in the EU.

3. Creating a better business environment

The Action Plan outlines tax measures to make the Single Market simpler and more attractive for business and therefore support growth and competitiveness in the EU. Companies say that tax systems need to provide more stability, legal certainty and be simpler to administer.

4. Increasing transparency

Tax transparency leads to fairer taxation and helps countries better tackle abuse. In March 2015, the Commission presented an ambitious Tax Transparency Package, as its first step in improving the EU's corporate tax framework. The Action Plan details the next steps towards greater tax transparency.

5. Improving EU coordination

  • Cooperation between EU Member States is essential to successfully tackle tax avoidance. The Action Plan sets out how current instruments to facilitate this cooperation could be improved, along with ideas for new ways of using existing groups to maximum potential.
  • It would ensure companies operating cross border in the EU would apply the same rules for calculating their tax, limiting the opportunities for these companies to manipulate their tax position. Work will begin immediately on a new proposal for a mandatory CCCTB. In the meantime discussions will continue on international aspects of the tax base linked to Base erosion and profit shifting (BEPS). This includes a common approach to tax havens, starting with a pan-EU list of listed countries, and the launch of a public consultation on further transparency measures, such as Country-by-Country Reporting.  

Click the following links for the press release, a question and answer fact sheet on the plan, and a timeline for the plan, which includes that work will begin immediately with the main proposals issued in 2016.