EU Council approves the following actions of international tax reform
On December 6 meeting, the EU's Economic and Financial Affairs Council (ECOFIN) approved a number of measures for improvement international observance of the tax legislation.
Specifically, the ECOFIN provides access for tax authorities to information, held by authorities responsible for prevention of money laundering; reached a consensus on the Directive project that aimed at closing of “hybrid mismatches” with the taxation systems of three countries; also made the decision concerning the offer to recommence the common consolidated corporate tax base (CCCTB).
The Directive on exchange of information on beneficial owners of the companies it is intended to support tax authorities controlling the correct application of tax rules, thereby helping to prevent tax avoidance and tax fraud.
At the second stage after the intensive discussions, Council agreed to stabilize the document for the majority of provisions Directive's plan about hybrid mismatches, leaving only two questions to solve them on the next weeks: rules that would allow Member States to apply the limited benefits and date of realization.
“This directive will prevent corporate taxpayers for exploiting disparities between tax jurisdictions, in order of reducing their general tax liability”, said the Slovak Minister for Finance and President of the Council Peter Kazimir. “Such agreements are common and they lead to the erosion of tax bases of corporate taxpayers in the EU”.
Also, he said, that their work shows that they are serious about combating illegal tax practices in the EU, as well as international levels in coordination and cooperation with the G20 and the OECD.
Finally, the Council adopted a list recommendations concerning renewals of CCCTB project of the European Commission. This initiative will lead to the introduction of harmonized rules for calculating the tax base of companies in all EU member states. After that, the tax revenue will be collected and distributed between the Member States approach formulary distribution, in which the proceeds will be distributed on the basis of factors such as turnover, sales and employment levels of the population.
The Council stated that, for a start, the EU member states should “concentrate their efforts on the rules for calculating the tax base and, in particular, on new force majeure renewed legislative initiative”.