EU Announce Proposals on BEPS

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On 28th January 2016 the European Commission issued a press release on its proposals for coordinated EU wide action against Base Erosion and Profit Shifting (BEPS), following on from the work done by the OECD.

The Anti Tax Avoidance Package calls on Member States to take a stronger and more coordinated stance against companies that seek to avoid paying their fair share of tax and to implement the international standards against BEPS.

Key features of the new proposals include:

– measures to block the most common methods used to avoid paying tax;

– a recommendation to Member States on how to prevent tax treaty abuse;

– a proposal for Members to share information on MNEs operating in the EU;

– actions to promote good tax governances internationally;

– a new EU process for listing third countries that refuse to play fair.

The Commission believes that these measures will hamper aggressive tax planning, boost transparency between Member States and ensure fairer competition for all businesses in the Single Market.

The Package makes specific proposals to ensure companies pay tax where they make their profits, it seeks to boost transparency on the taxes that companies are paying and it includes a strategy to ensure a fair and level playing field for all businesses and countries.

The two legislative proposals of the Package will now be submitted to the European Parliament for consultation and to the Council for adoption. The Council and Parliament should also endorse the Tax Treaties Recommendation and Member States should follow it when revising their tax treaties. Member States should also formally agree on the new External Strategy and decide on how to take it forward as quickly as possible once it has been endorsed by the European Parliament.

The Press Release is here:

http://europa.eu/rapid/press-release_IP-16-159_en.htm

and full details of the anti-avoidance package are here:

http://ec.europa.eu/taxation_customs/taxation/company_tax/anti_tax_avoidance/index_en.htm

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