EU – Baltic States, Financial Services, Legislation, Markets and Companies

In the Commission’s Political Guidelines adopted in July 2014, President Juncker stated that the EU member states needed more fairness in the internal market’s development. While recognising the competence of the EU states for their taxation systems, the Commission would step up its efforts to combat tax evasion and tax fraud, so that “all contribute their fair share”.

The Commission is rapidly delivering on the commitments made in its Work Program to clamp down on tax evasion and tax avoidance, and ensure that companies pay tax where they generate profits.

Short history

On 18 March 2015, the Commission proposed a Tax Transparency Package to create more openness and cooperation among the EU member states on corporate tax issues. A key element in the Package was a proposal for the automatic exchange of information on tax rulings.

This proposal received unanimous political support from the EU finance ministers at the Informal ECOFIN meeting during Latvian Council Presidency in Riga in April 2015.

Presently, the EU member states are discussing the package at technical level with the aim of reaching agreement by the end of 2015.

In the Tax Transparency Package, the Commission also announced that it would present before the summer “a detailed Action Plan on corporate taxation, which will set out the Commission's views on fair and efficient corporate taxation in the EU and propose a number of ideas to achieve this”.  

Commissions’ opinion

Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, said: "We want corporate taxation to be fair and growth-friendly. Every company, big or small, must pay its share of tax at the place where it makes its profits. Corporate taxation is a Member State responsibility, but the EU must set a clear and renewed framework for fair and competitive corporate taxation."

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: "Our current approach to corporate taxation no longer fits today's reality. We are using outdated tools and unilateral measures to respond to the challenges of a digitalised, globalised economy. For fairer taxation and less fragmentation in the Single Market, we need to fundamentally review our corporate tax framework in the EU. Big, small and medium sized companies should be able to benefit from the internal market on an equal footing."

Tax evasion as a priority

President Jean-Claude Juncker has made the fight against tax evasion and avoidance a top political priority of the present Commission. The key objective is to ensure that companies are taxed where their profits are generated and cannot avoid paying their fair share of tax through aggressive tax planning.

An important first step was taken in March 2015 when the Commission presented a first package of measures to boost tax transparency in the EU.

The College agreed to take a more comprehensive approach to improve corporate taxation in the EU, also taking into account ongoing international reforms in this field. The orientation debate (Brussels, 27 May 2015) will feed into an Action Plan in June 2015, which will include a strategy to re-launch the works on the introduction at the level of the EU of a Common Consolidated Corporate Tax Base (CCCTB), to implement measures against tax avoidance which are being developed at international level within the OECD, and to further strengthen tax transparency while taking into account the necessity to reinforce the efficiency of the tax environment for businesses in the internal market.

Reference: European Commission, Press Release IP-15-5044 “Commission prepares an Action Plan for fairer and more growth-friendly tax system in Europe”, Brussels, 27 May 2015. In:

http://europa.eu/rapid/press-release_IP-15-5044_en.htm