10/11/22

INTERNATIONAL TAX: EU finance ministers agree to broaden corporate tax measures.

As published on transferpricingnews.com, Thursday 10 November, 2022.

EU finance ministers, on November 8, agreed on a revised code of conduct for business taxation to identify and curb harmful tax measures of member states.

“The ultimate goal is to tackle harmful tax competition and tax avoidance in the EU,” a press release issued by the EU Council states.

The primary task of the code of conduct group has been to detect and eliminate harmful tax measures in EU member states since 1997. The revision of the code, the first one since 1997, means that member states will broaden the scope of the tax measures under scrutiny when examining harmful tax practices within the EU.

“The update of the code took the form of a resolution of the Council and of the representatives of the governments of the member states, meeting within the Council, on a revised code of conduct for business taxation,” the press release states.

The revised code of conduct introduces in particular the concept of tax features of general application. Whereas previously only preferential measures (such as special regimes or exemptions from the general taxation system) were examined, under the new rules the scope will also include tax features of general application. These will be regarded as harmful if they lead to double non-taxation or the double or multiple use of tax benefits.

The revised code of conduct further clarifies the review process in the code of conduct group, which is responsible for the administration of the code.

Zbyněk Stanjura, Minister of Finance of Czechia, commented: “Our experts in taxation constantly look out for harmful tax practices. Since starting its work in 1997, the code of conduct group succeeded in eliminating around 140 harmful tax practices within the EU. The code of conduct of business taxation has not been amended since 1997 and today´s agreement further improves its effectiveness also in the light of the recent international tax reform.”