| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy


Finfacts changes from 2015

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Global Cost of Living

Irish Tax - Income/Corporate

 

Feedback

 

Content Management by interactivetools.com.

News : EU Economy Last Updated: Jun 19, 2015 - 7:44 AM


Multinational companies pay on average 30% less tax than domestic competitors in EU
By Michael Hennigan, Finfacts founder and editor
Jun 18, 2015 - 8:44 AM

Email this article
 Printer friendly page

Pierre Moscovici, EU commissioner for Economic and Financial Affairs, Taxation and Customs, June 17, 2015

On Wednesday the European Commission re-launched its Common Consolidated Corporate Tax Base (CCCTB) proposal. It also published a first pan-EU list of third-country non-cooperative tax jurisdictions and launched a public consultation to assess whether companies should have to publicly disclose certain tax information. The Commission also said that studies show that in the European Union (EU) "multinational companies pay on average 30% less tax than their domestic competitors. Corporate tax avoidance can result in SMEs carrying a heavier tax burden, as governments compensate for the revenue losses."

Under CCCTB, companies would use just one EU system to compute their taxable income rather than dealing with the rules in the 28 different member states, saving businesses up to €1bn annually in in administration and compliance costs administrative costs.

The Commission said around 70% of all profit shifting is done through transfer pricing and the location of intellectual property (see section on transfer pricing). "It is therefore important to improve the way companies determine their intra-group prices and to make sure that lower tax rates for intellectual property (brands and patents) are linked to where the underlying Research and Development (R&D) activity takes place."

It added that certain preferential tax regimes allow companies to shift profits away from where their real activities are based, in order to benefit from a lower tax rate in another country. "Patent Boxes —
which are special tax regimes for intellectual property revenues — have been identified as being particularly problematic in this respect.

In 2014, Member States agreed a non-binding new approach on Patent Boxes to ensure fairer tax competition. Under this new approach, companies should only enjoy a lower tax rate if their R&D activity is linked to the country that offers it.

The Commission will provide guidance to Member States on how to implement this new approach and monitor their progress. If, after 12 months, Member States are not properly applying the new approach, the Commission will propose binding legislation instead."

National tax authorities will also have to be more transparent about their corporate tax rules, making it difficult for large companies to arrange secret deals with governments.

The Commission said that it has no intention of interfering with Member States' sovereign right to decide their statutory tax rates.

Both Ireland and the UK opposes CCCTB and the re-launched plan proposes first to establish a common set of rules and only later introduce the main proposal where corporate tax revenues would be redistributed across the region according to where the companies'  real economic activity occurred.

The European Commission is also promising to allow companies to offset losses made in some EU countries against profits made elsewhere.

Pierre Moscovici, commissioner for Economic and Financial Affairs, Taxation and Customs, in a comment on a recent trip he made to Ireland, said: "I could see that the present text was a non-starter but that there could be room for discussion on this two-step approach."

EU's list of 30 tax havens omits the biggest 4 in Europe

OECD BEPS Tax Project: Amazon books UK sales in UK; Australia proposes up to 100% in penalties

Related Articles


© Copyright 2015 by Finfacts.ie

Top of Page

EU Economy
Latest Headlines
Spain's strong recovery to slow in the next few years
Italy's Mezzogiorno is Achilles' heel of Euro Area - lowest birth rate since 1862
Euro Area GDP grows at weak 0.3% in Q2 2015
German GDP up 0.4% in Q2 2015; France's GDP stagnates
Germany's Surplus: Lots of critics; Credible solutions scarce
Euro Area industrial production dips in June and May after a flat April
Greece faces two years of recession according to EU officials
High EU youth unemployment rate not as bad as it seems
Eurozone retail PMI surges to highest since January 2011
ECB monetary policy still tight for Southern Europe
German exports fell in June — surplus at record; Exports up 13.7% year-on-year
Eurozone manufacturing sector continued to expand in July
Weak euro unlikely to have significant impact on Euro Area growth
Is Euro Area Ireland's top trading partner?: EU28 is overwhelmingly UK's
German car firms boost exports from Spain, UK, Portugal, Czech Republic, Slovakia, Hungary and Romania
Flash Eurozone manufacturing/ services PMI close to four-year high despite Greek crisis
Krugman calls euro a Roach Motel; Hotel California gets 1-star grade
Greece & Euro Crisis: July 2015 articles from Finfacts
Greece and other poor countries in Euro Area will not become rich
Euro Area manufacturing/ services PMI hits four-year high in June
Western European car market: Recovery continues
Greece could become a failed state like Venezuela
Multinational companies pay on average 30% less tax than domestic competitors in EU
EU's list of 30 tax havens omits the biggest 4 in Europe
China to invest in Juncker's European investment fund
Greek talks collapse; Game theorists gambling with future — Germany's vice-chancellor
German exports and industrial production in strong rises in April
Tackling Inequality: Scandinavian countries have the most successful welfare systems in Europe
Eurozone unemployment fell by 130,000 in April 2015 — down 849,000 in 12 months
Eurozone service sector business activity slowed during May
German 2015 GDP forecast cut; Jobless level at 24-year low
Eurozone manufacturing in modest acceleration in May
FDI into Europe at record in 2014; UK on top: Germany location for future investment
Eurozone economy loses growth momentum; Jobs growth rises
Athens leak suggests Juncker has plan for Greece
Draghi will not end QE early but warns of risks
Eurozone grows faster than US and UK in Q1 2015
German GDP at slower pace, France faster in Q1 2015
Germany may cut income tax; Germans still shun risky investments
Germany had record exports and imports in March 2015