BusinessEurope position on the anti-tax avoidance package

Key messages

BusinessEurope fully supports fair tax competition and the objective to fight fraud and evasion as it creates strong competitive distortions at the expense of the vast majority of businesses who pay their taxes in full.
However, we are concerned that this proposal goes beyond the OECD agreement and by raising effective corporate tax rates and deviating from international agreements will put the EU at a competitive disadvantage in attracting global investment. We are particularly concerned the Commission has not produced an impact assessment for this proposal.
A statement at the ECOFIN Council that all member states will revise their national tax systems to be consistent with OECD’s standards would be preferable and sufficient at this stage. The Commission could be given a role to review whether appropriate changes have been made in line with such a commitment.

On January 28, 2016 the European Commission presented a proposal for a directive containing measures to prevent tax avoidance and to improve the functioning of the internal market. The Commission states that the directive is meant to ensure that member states transpose the OECD BEPS recommendations into their national tax systems in a coherent and coordinated fashion.
However, we believe that by going beyond the OECD agreement the proposal will undermine EU competitiveness, particularly by deviating from international agreements.
The Commission should withdraw its proposals, with member states agreeing only to implement the BEPS agreement.

The OECD calculates that only around 5% of corporate tax revenues are currently misallocated between countries. This compares with a gap in VAT revenue for example of over 15% across the EU.
In 2012 businesses paid nearly € 2 trillion of taxes in the EU.