On 17 June 2015, the European Commission (EC) presented their five-tier Action Plan on a fair and efficient corporate taxation within the EU. The Action Plan sets out a series of initiatives to tackle tax avoidance, secure sustainable revenues and strengthen the Single Market for businesses.
In particular this means that:
- Companies should pay tax where they generate profits
- Taxation should be more growth-friendly, and this should not be compromised by competition for mobile tax bases
- One country’s preferential regime should not lead to revenue losses for other countries
- Honest business should not lose out to tax-avoiding competitors
- Third countries should not be able to entice companies to shift profits out of the EU
To achieve these goals, corporate tax rules needs to be adapted to modern realities and Member States need to cooperate more closely on corporate tax issues.
The Action Plan sets out five key areas for action:
1. Re-launching the Common Consolidated Corporate Tax Base (CCCTB)
2. Ensuring Effective Taxation
3. Increasing Transparency
4. Additional measures to improve the tax environment of the Single Market for business
5. Develop EU tools for coordination
This Action plan will be the basis for the EC to work on corporate tax policy over the next years. Work will evolve to take account of the input of the European Parliament, other EU institutions, stakeholders and outcomes of the OECD BEPS initiative.