17/02/17

EU to ramp up action on harmful global tax practices

The EU has signalled plans to ramp up its work to tackle harmful tax practices internationally, with the Council working group that oversees implementation of the EU's code of conduct on business taxation finalising a list of jurisdictions that are considered non-cooperative in tax matters to be published shortly, reports CCH Daily.

The code of conduct on business taxation sets out criteria for assessing tax measures that potentially encourage harmful tax competition. It is implemented through a voluntary commitment by member states to peer-reviewed 'standstill' (refraining from introducing harmful new tax measures) and 'rollback' (abolishing existing harmful tax measures).

 On 1 February the working group sent letters to 92 third country jurisdictions, requesting information for a screening process which will result in the production of the list ‘in the near future’.

In addition, the group has appointed a new chairperson Fabrizia Lapecorella, director general of finance at the Italian ministry of economy and finance. It has also expanded its work to new areas, including anti-abuse measures; transparency and the exchange of information in the area of transfer pricing; administrative practices; links to third countries.

The working group says that in these areas, several 'soft law' initiatives (ie, rules that are neither strictly binding nor lacking legal significance) have been agreed, whereas it wants to ensure they are covered by its code of conduct.