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Europe: Tax Transparency Package to combat corporate tax avoidance

Currently, it is at the discretion of Member States to decide whether tax rulings might be relevant to other Member States. The Tax Transparency Package includes measures for Member States to automatically exchange information on their tax rulings. According to the European Commission (EC), a strict timeline should be set: every three months, national tax authorities must send a report to all other Member States on all cross-border tax rulings they have issued in that period. This allows other Members states to request more detailed information on rulings if required.

The Tax Transparency Package also contains other initiatives to advance the tax transparency in the European Union (EU):
• Assessing possible new transparency requirements for multinationals
The EC will examine the feasibility of new transparency requirements for companies, such as public disclosure of tax information by MNE’s. The EC will assess the impact of possible additional transparency requirements.
• Reviewing the Code of Conduct on Business Taxation
The EC will work with Member States to review the Code of Conduct in order to make it more effective in ensuring fair and transparent tax competition within the EU.
• Quantifying the scale of tax evasion and avoidance
The EC will work with Member States to quantify the scale and impact of tax evasion and avoidance.
• Repealing the Savings Tax Directive
The EC is proposing to repeal the Savings Tax Directive, as its content has been overtaken by more ambitious EU Legislation.

Next Steps:

  • The two proposals of the Package will be submitted to the European Parliament for consultation and to the European Council for adoption.
  • The action plan on corporate taxation will include the launch of a debate on the Common Consolidated Corporate Tax Base (CCCTB) and ideas for integrating the Action Plan on Base Erosion and Profit Shifting (AP-BEPS) at the EU level.
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