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EU executive calls on skeptical governments to support common business tax rules

EU executive calls on skeptical governments to support common business tax rules

The European Commission on Wednesday called for skeptical governments to support its efforts to set common rules to calculate taxable business income across the continent.
EU Taxation Commissioner Laszlo Kovacs said he was looking for unanimous support from all 27 European Union nations that have the power to veto EU-wide tax decisions.
The Commission has said a common consolidated corporate tax base for the EU would cut compliance costs for companies and make Europe a more attractive business location.
The plan would simplify many of the complications that companies face when they move goods and file taxes across different jurisdictions, and would allow them to offset losses suffered in another EU country.
The Commission said the rules could be made optional for companies, but did not explain how this would work.
The current complex patchwork of tax rules can be expensive for companies to manage and can lead to them being taxed twice _ but it may also allow them to avoid or reduce high taxes they face in one country. Some EU nations effectively act as a tax haven by setting low rates for some types of corporate income.
"I know this project is an ambitious one and has raised some skepticism from certain member states," Kovacs said, acknowledging that seven countries _ Britain, Ireland, Lithuania, Latvia, Slovakia, Cyprus and Malta _ had expressed "concerns, doubts and some opposition" when finance ministers last discussed the issue a year ago.
They will talk about the EU's efforts again at a June 5 meeting.
Kovacs stressed that he did not want to interfere with individual countries' right to set taxes. He wants to table a legal proposal next year to set rules on what business income could be taxed.
But he could not give details about how his plans would share out tax revenue from companies, saying work on this had only just started.
Countries that have a flat tax rate _ such as Slovakia _ fear that a common tax base would be narrower than it is now while others fear it could allow the EU move toward imposing an EU-wide tax band.
Kovacs insisted neither was the case. A harmonized common base would be "as broad as possible" while setting the tax rate would remain a national responsibility, he said, adding that skeptics would be won round once the plans were in place.
"They will realize that it will not infringe on the tax sovereignty of the member states," he said.
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On The Net:
http://ec.europa.eu/taxation_customs/taxation/company_tax/common


Updated : 2021-05-12 19:30 GMT+08:00