Almost a year after Hungary and Estonia vetoed the reform (see EUROPE 12848/9), EU Member States adopted the reform of the ‘Code of Conduct’ Group on business taxation on Tuesday 8 November at the Economic and Financial Affairs Council.
This reform extends the scope of the Code of Conduct to the general tax regimes of the Member States and not just to the framework of preferential tax regimes. This is the first revision of the Code since its establishment in 1997.
“We confirmed today our commitment to a fairer tax environment in the EU by reinforcing the rules we apply when tackling harmful tax practices in an evolving economy”, said Zbyněk Stanjura, Minister of Finance of the Czech Republic, in a statement.
From the entry into force of the text on 1 January 2024, all tax measures adopted by member states will be subject to evaluation by the Code of Conduct Group and the European Commission, a diplomat contacted by EUROPE explained on Tuesday 8 November.
Mr Stanjura said that tax features of general application “will be considered harmful if they result in double non-taxation or double/multiple use of tax benefits”. Double non-taxation occurs when neither country imposes taxes because, for example, one cannot do so due to the prohibition of double taxation and the other applies a tax exemption.
“It is a question of general consistency”, the European diplomat said.
For the EU Council conclusions: https://aeur.eu/f/3ye (Original version in French by Anne Damiani)