EU to Revive Common Tax Base Plan, Adopt BEPS Plan

Jan. 11 — The European Union is resuming efforts to create a common system for calculating the tax base of businesses operating in the EU, and aims to adopt the OECD BEPS package by the end of the Dutch EU presidency in June, a top official said.

“This is the year in which the common consolidated corporate tax base (CCCTB) will be re-born,” Pierre Moscovici, European Commission commissioner for economic and financial affairs, taxation and customs, told members of the European Parliament at meeting of the special committee on tax rulings Jan. 11.

Moscovici said minimum rates had not yet been agreed upon. “The basis that we are working in is effective taxation,” he said. “No company will be in a situation where they will pay no taxes or too little in tax.”

Though the European Commission proposed a similar CCCTB package in 2011, it was blocked in the Council of Economic and Financial Affairs, only to see new life this past year after the emergence of the LuxLeaks scandal involving multinational companies (231 TMIN, 12/2/15).

BEPS

Moscovici also expressed hope that the EU would adopt the Organization for Economic Cooperation and Development (OECD) base erosion and profit shifting (BEPS) plan, released Oct. 5, by the end of the Dutch presidency in June 2016.

In fact, he said anti-avoidance proposals to be submitted by the EU’s executive arm this month will go beyond BEPS recommendations. “We’re going to be more specific and ambitious in our approach,” Moscovici said.

Moscovici said the “common base” of the EC’s tax proposals will align with the OECD BEPS plan, and include data exchanges between EU member states, though the EC plan will probably not call for making tax rulings public.

“Personally I am in favor of making the data public,” Moscovici said. “But we should not adopt any measure which would negatively impact our companies compared to foreign competitors. We have to see whether we can gain reciprocity from U.S. companies, for example, before we decide on this.”

The initial proposals will be based on an impact assessment that the Commission is in the process of conducting, he said.

VAT, Digital Economy

On ways to combat value-added tax fraud, Moscovici revealed that the Commission could release initial proposals by March.

“Though we are still discussing whether to deal with VAT issues together or the digital economy and its VAT issues separately,” he said.

With assistance from Rebecca Christie in Brussels.
Bloomberg BNA