This Tuesday, the European Commission will propose a common tax framework for companies in the European Union (EU) that have combined annual revenues of more than €750 million, with the aim of avoiding tax discrepancies and facilitating a minimum tax rate of 15 %.
“This proposal aims to find a solution that reconciles all aspects by introducing a common framework for the taxation of corporate income in the Union. The common framework will simplify the tax environment in the internal market, as it will replace the 27 forms different methods of determining the tax base for groups of companies with joint annual income exceeding 750 million euros,” argues the community executive.
This is a proposal that will be announced today, to which the Lusa agency had access, regarding a framework for corporate tax in Europe, whose objective is to create a common framework for corporate tax to avoid “the complexity and the discrepancies in the interaction of different tax systems [que] “create an uneven playing field and increase tax uncertainty and tax compliance costs for companies operating in more than one Member State.”
This change is also expected to facilitate the implementation of the European directive that introduced an effective tax rate of at least 15%, following the global agreement to tax the profits of multinational groups.
There is currently no common approach in the EU to calculating the tax base of companies, which means that EU companies must comply with a different corporate tax system in each Member State in which they carry out their activity.
This is the scenario that Brussels wants to avoid, creating a common legal framework to harmonize corporate income tax systems, in order to guarantee fair tax competition.
At the same time, the idea is to update European tax rules following the changes that have occurred in recent years in the field of tax policy, particularly after the consensus reached two years ago between 135 countries of the Organization for Economic Cooperation and Development ( OECD) and then the At EU level so that multinationals pay at least 15% taxes on profits within the community.
Previously, in 2020, the Council, Parliament and the European Commission agreed that a common corporate tax base could form the basis of a new own resource to be proposed by the community executive.
In a similar way to what is defined in the OECD agreement, the idea is to cover business groups with combined annual income of at least 750 million euros, being optional for the rest.
This common framework will be accompanied by tax simplification, thus providing “a centralized reference point to address common issues, such as an information return for the entire group, and […] an adequate degree of coordination and collaboration between national tax administrations,” according to the proposal.
“National fiscal sovereignty” is safeguarded, since countries must establish rules on the sanctions applicable to possible violations, concludes Brussels.
Source: TSF
