European Commission to unveil EU-wide mandatory tax base for multinationals

STEPHANIE LECOCQ

Danish EU Commissioner for Competition Margrethe Vestager speaks at a news conference on a case of illegal tax benefits for US company Apple at the European Commission, in Brussels, Belgium, 30 August 2016. Ireland gave illegal tax benefits to Apple worth up to 13 billion euros, Vestager said explaining the results of European Commission investigations examining whether decisions by tax authorities in Ireland, with regard to the corporate income tax to be paid by Apple comply with the EU rules on state aid. The Commission has been investigating under EU state aid rules certain tax practices in several member states following media reports alleging that some companies have received significant tax reductions by way of 'tax rulings' issued by national tax authorities.

European Commission to unveil EU-wide mandatory tax base for multinationals


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Next week, the European Commission will unveil a proposal aimed at decreasing corporate tax avoidance.

The so-called Common Corporate Tax Base (CCTB) draft regulation envisages an EU-wide mandatory tax base for companies with total revenue in excess of €750 million, Reuters reports.

When a company exceeds this revenue ceiling all its income, across EU member states, will be consolidated into a single bill. Therefore, multinational corporations will have to pay taxes for EU-wide revenues.

Currently, companies make use of sophisticated accounting techniques to reduce their final tax bill by taking advantage of the variation between 28 national taxation system regimes.

The question is whether the European Commission can master a consensus of corporate taxation; a similar plan was shelved due to member state opposition in 2011.

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