The European Commission’s new proposals to simplify tax rules for businesses, presented on Tuesday 12 September, have met with varying degrees of enthusiasm.
The proposals come in the form of three directives: - the ‘BEFIT’ initiative, which should simplify tax compliance (see EUROPE 13248/20); - a common approach to transfer pricing; - a directive to simplify the taxation of small and medium-sized enterprises (SMEs) (see EUROPE 13248/21).
In a press release published the same day, Jonás Fernández MEP (S&D, Spanish) welcomed the measure, which “partially answers a longstanding demand from the Socialists and Democrats to harmonise the tax base for corporate income tax”. In his view, appropriate harmonisation would dissuade companies “from evading tax by abusing the loopholes between the different national legislations within the EU”.
His colleague, France’s Aurore Lalucq (S&D), urged EU Member States to “act responsibly and stop blocking progress on tax policy”. This fear was shared by Markus Ferber (EPP, German): “the Commission has tried the idea of a grand reform of corporate tax rules time and again and has picked up a bloody nose each time. Even though the proposal has already been watered down considerably, there is little reason to believe that this time will be different”. He did, however, welcome the measures aimed at SMEs.
However, Manon Aubry (The Left, French) was not convinced by this presentation. Interviewed by EUROPE on Tuesday, she worried that ‘BEFIT’ would not help combat tax evasion. Chiara Putaturo, Oxfam EU tax expert, made the same criticism in a press release: “This [...] reform gives big business a free pass to continue booking taxes where they only have empty offices and to siphon off their profits to EU tax havens”. (Original version in French by Anne Damiani)