Following the OECD's recommendations for reforming the international tax system last year, the European Commission has today announced proposals aimed at a coordinated EU-wide response to corporate tax avoidance.
Responding to today’s announcement, Rebecca Reading, Corporate Tax Partner for RSM, said:
‘I think these proposals are a positive step towards stamping out aggressive tax practices practised by large corporates on European level, and align well with the OECD’s tax avoidance measures announced last year.
‘The UK is already on board with many of the measures introduced by the OECD and so there won’t be too many changes here for us to address. However I do think it will be a different matter for a number of other countries who will now have to radically re-think their approach to tax.
‘One thing I was surprised to see was the proposal by the EC to re-launch the Common Consolidated Corporate Tax Base (CCCTB). This kind of approach was rejected by the OECD in favour of the arms-length principle - possibly because it was a case of being a perfect solution that no-one knew how to get to. In reality I can’t see this ever really being fully embraced by the member states, but even without it, I think that the proposals will start to get us moving in the right direction and working together to tackle the tax avoidance problem.’