BEPS 2.0: The EU’s Take on the Matter

The latest European Commission “fact sheet” pertains to BEPS, as seen by the EU, for the EU…

The complete “Questions and Answers on the Action Plan for Fair and Efficient Corporate Taxation in the EU” is available here.

It includes these nuggets of “tax wisdom”:

“Why has the Commission developed an Action Plan to improve corporate taxation in the EU? 

Corporate taxation in the EU needs to be fundamentally reformed. Today’s corporate tax systems in EU Member States were conceived in the 1930s, when cross-border trade was more limited, business models were simpler and products were tangible. But as business evolves, so too must the tax system. The current rules no longer work in a globalised, digital, mobile business environment. This outdated system is inefficient and creates opportunities for companies to use sophisticated tax-planning schemes to escape taxes. Some companies currently generate large profits in the Single Market, but pay little or no tax in the EU.”

[…]

“What does the Action Plan aim to achieve?

The Action Plan aims to establish a new approach to corporate taxation in the EU to tackle tax avoidance, ensure sustainable revenues and foster a better business environment in the Single Market.

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 businesses should not lose out to tax-avoiding competitors
• Third countries should not be able to entice companies to shift profits out of the EU.”

The complete “FAQ” available here is worth the read for any business involved in Europe.

Robert Robillard, Ph.D., CPA, CGA, MBA, M.Sc. Econ.
Senior Partner, DRTP Consulting Inc.
514-742-8086; robertrobillard “at” drtp.ca
www.drtp.ca

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