EU plans tax overhaul to shore up post-lockdown economy
Brussels wants to introduce a string of measures to cut down on corporate tax evasion and help shore up the economic recovery.
It aims to: remove obstacles to registering, declaring and paying tax; use new technologies to increase compliance and cut red tape; extend EU tax transparency rules to online platforms to make sure that they pay their fair share; reform the tax code of conduct; and tackle harmful tax practices in the EU.
The announcement came on the day Brussels suffered a setback when a court rejected a European Commission demand that Apple pay €13 billion in Irish back taxes.
It’s estimated €35 billion is lost each year in the EU to corporate tax avoidance, according to several studies,
“Now, more than ever, member states need secure tax revenues to invest in the people and businesses who need it most,” said Valdis Dombrovskis, the European Commission’s executive vice-president.
Paolo Gentiloni, European Commissioner for the economy, said: “Fair taxation is the springboard that will help our economy bounce back from the crisis. We need to make life easier for honest citizens and businesses when it comes to paying their taxes, and harder for fraudsters and tax cheats. These proposals will help member states to secure the revenues they need to invest in people and infrastructure while creating a better tax environment for citizens and businesses throughout Europe.”
The announcement is just the beginning of a planned overhaul of tax at EU level. The European Commission will set out further proposals in the autumn which “will complement work underway at global level to address the challenges of the digital economy and ensure all companies pay their fair share”.
Any changes to the tax code are likely to meet resistance from some EU countries who argue the reforms would harm their economies.