Wednesday

2nd Dec 2020

EU considering mandatory corporate tax base

  • The EU will revive a plan for a common corporate tax base. (Photo: .michael.newman.)

The European Commission has said it will reintroduce a previously shelved plan for a common corporate tax system in a bid to clamp down on tax avoidance by multinationals.

An “action plan” against aggressive tax planning will be unveiled on 17 June, EU Commissioner Valdis Dombrovskis said Wednesday (27 May).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

It will include a “relaunch” of a 2011 proposal for a law to give companies the option to calculate their taxable profits once for all EU member states.

The tax revenues would then be redistributed to the member states where the company is active.

The plan, called Common Consolidated Corporate Tax Base (CCCTB), never saw the light of day because of opposition from member states.

“This was a visionary proposal - maybe a bit too visionary for the reality of EU tax policy four years ago – and this is why we need to relaunch CCCTB”, said Dombrovskis, in charge of the euro and social dialogue.

Corporate tax rates vary from 12.5 percent in Ireland to around 30 percent in France and Germany.

Voluntary versus compulsory

Dombrovskis said that it is not yet clear if the 2011 proposal, which legally was never withdrawn, will resurface with some amendments, or if it will be a completely new proposal.

But it will be the “cornerstone” of the EU's new approach to making sure companies pay taxes where they make their profits.

Dombrovskis also noted that the commission will “reconsider” if company's participation in the CCCTB will remain voluntary.

“It's clear that especially those companies which are engaged in aggressive tax planning are not going to be the one to voluntarily opt in CCCTB system”.

A commission spokesperson added that while it seems the voluntary approach is "not the way forward", a decision has not yet been made.

With taxation a highly sensitive issue, the commissioner noted that it did not “specifically discuss minimum rates or harmonization of tax rates”.

Yet any moves in the area of taxation have to face the high political hurdle of unanimous agreement by all member states.

Previous optimism that a deal can be reach has proved to be misplaced. In 2013, at the height of revelations about tax havens, the then tax commissioner Algirdas Semeta said there was "new momentum" in EU capitals to accept CCCTB.

Special committee

Meanwhile, a special European Parliament committee investigating tax rulings – tax deals given to multinationals by national authorities - is hoping to get a three-month extension of its mandate.

The committee was set up after journalists uncovered the hundreds of tax deals given to companies set up in Luxembourg.

But the chairman of the group, centre-right French MEP Alain Lamassoure, downplayed what his committee will achieve.

“We cannot expect new revelations from our committee”, Lamassoure told this website.

He dismissed a report by this website that the committee is facing obstacles from the national governments it is investigating, saying they are giving “full cooperation”.

Lamassoure noted that some information can't be shared because of national laws.

“If they cannot provide information to their own national parliament, they can't give it to us”, he noted.

But the MEP also noted that “of course some of the answers were not very satisfying”. Lamassoure and his team will visit Ireland on Thursday (28 May) and the Netherlands the day after.

Brussels pushes common EU tax base

The European Commission on Wednesday proposed a system where companies will be able to file just one tax return for the whole of the EU, a move that Brussels stresses would not infringe on states' ability to set their own corporate tax rates.

EU plans 'revolution' on sweetheart tax deals

New EU plans to force governments to send quarterly reports on tax rulings are a “revolutionary” step towards overcoming corporate secrecy, the bloc’s tax commissioner has said.

Germany asks capitals to give a little in EU budget impasse

European Parliament negotiators are demanding €39bn in new funding for EU programmes such as Horizon research and Erasmus, in talks with the German EU presidency on the budget. Meanwhile, rule-of-law enforcement negotiations have only just begun.

EU budget talks suspended in fight for new funds

MEPs are requesting additional, new funding of €39bn for 15 EU programs. The German presidency argues that budget ceilings, agreed by EU leaders at a marathon summit in July, will be impossible to change without a new leaders' meeting.

Budget deal struck, with Hungary threat still hanging

Ultimately, the European Parliament managed to squeeze an extra €16bn in total - which will be financed with competition fines the EU Commission hands out over the next seven years, plus reallocations within the budget.

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!
  2. UNESDAMaking healthier diets the easy choice
  3. Nordic Council of MinistersUN Secretary General to meet with Nordic Council on COVID-19
  4. UNESDAWell-designed Deposit Return Schemes can help reach Single-Use Plastics Directive targets
  5. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  6. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector

Latest News

  1. EU law needed to protect free press, NGOs say
  2. Socialists demand resignation of EU border-agency chief
  3. Orbán ally admits he was at Brussels lockdown 'sex party'
  4. Legal battle over oil giant Shell's emissions begins
  5. Chance for Christian Democrats to draw line against extremism
  6. Frontex takes transparency activists to EU court
  7. EU's opportunity to curb online politics ads
  8. China and Russia encircling divided Western allies

Join EUobserver

Support quality EU news

Join us