The tax compliance costs faced by European private companies have risen to between 1% and 2% of their turnover, according to a study commissioned by the European Parliament’s Subcommittee on Tax Matters (FISC), published on Wednesday 22 February.
These costs average around €15,000 per year for businesses based in EU countries and the UK. The study revealed great heterogeneity between countries. For example, the Nordic and Baltic countries are among the best performers, as they use standardised measures by tax experts and conduct surveys on transparency, frequency of changes and complexity of administrative procedures. The study therefore suggested harmonising national tax rules and tax bases.
Small and medium-sized enterprises (SMEs) face relatively higher compliance costs than large enterprises. The study recommended avoiding the introduction of multiple tax systems and options, including different definitions of the tax base for large and small companies, or optional tax regimes. This would indeed increase complexity.
This study comes at a time when the future harmonisation of corporate taxation in Europe (BEFIT) is the subject of a public consultation (see EUROPE 13107/21).
To read the study: https://aeur.eu/f/5gw (Original version in French by Anne Damiani)