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The action plan which has been presented today by the European commission for the reform
of the corporation taxation is based on three fundamental principles which each tax policy in
future must pay heed to:
First:
Corporations which achieve profits in the European Union, must pay taxes on these
profits also in the European Union. The fact that multinational corporations move around their
profits in the internal market and then transfer them in tax heavens cannot any longer be
accepted.
Second:
The taxes paid by the corporations in the European Union must be just from the point
of view of size, and must start from the location where the corporations are effectively
operating. It must be forbidden to corporations to make use of legal loopholes and tax
incentives in order to reduce their entire taxable income in the European Union to a small
amount.
Third:
The corporation taxes must support the European agenda for investments and jobs,
they must not undermine it. Taxing hindrances must be eliminated, in order to create equal
starting conditions for all enterprises – small ones as well as big ones. The tax base must be
broadened and we need real incentives for real investments.
The heart peace of our action plan is the restart of the proposal for a joint common
consolidated corporate tax base (CCCTB), which the Commission has already presented in
2011. The CCCTB is offering to the corporations one single system for the computation of
their profits which are taxable in the European Union instead of in the 28 national tax
systems. It is of benefit for small and medium sized as well as for multinational corporations.
Corporations which are also active in other member states of the European Union can save
one billion Euro of compliance costs and uncountable hours of administrative work.
By summarizing all profits which a corporation is achieving in the European Union, then with
the CCCTB not only goes away an opportunity for a misusing tax avoidance.
Up to then we must take care of the most urging problems of our corporation tax systems. We
want to reform the corporate tax law, we want to limit the low taxation and no taxation and
we want to better safeguard against tax fraud. We shall also take care in Europe for better
regulations about transfer prices and about tax incentives for profits from intellectual
property, which is responsible for 70 % of profit shifting in the European Union. Misusing
practices must be finished.
We want to strengthen the internal market for multinational corporations which are abiding to
the regulations: Where different member states continue to tax twice, there must be
procedures in order to finish this.
Not least, we are working for tax transparency which is indispensable for fairer and more
open taxation of corporations. In March we have also proposed an automatic information
exchange about advance tax assessments between European Union member states. We now
want to carry this transparency program one step further and extend it beyond the European
IAFEI Quarterly | Issue 29 | 9