New EC Proposal for Unified EU Corporate Tax

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Following two failed attempts in 2011 and 2016, this week the EU Commission presented its plans for the unification of the corporate tax rule book of member states. Decision-makers in Brussels decision intend to bring a halt to the race among EU member states to lower corporate taxes in their attempt to appeal to the private sector. Since previous similar proposals, a number of governments have been criticized for being unable to tackle unfair tax-optimization strategies used by tech companies.

“Taxation needs to keep up to speed with our evolving economies and priorities. Our tax rules should support an inclusive recovery, be transparent and close the door on tax avoidance,” Commission vice-president Valdis Dombrovskis said in a statement, speaking about the proposal entitled “Business in Europe: Framework for Income Taxation (BEFIT).”

The core of the new proposal is for the EU to create a single corporate tax rulebook and reallocate profits among member states. However, the actual legal proposal will only be presented in 2023 according to an announcement by the EC.

CET Editor

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