European Union Fights Against Tax Evasion

Major global companies such as Starbucks, Amazon and Apple may be facing a series of new European Union tax proposals in the upcoming year. The proposed laws will make it harder for companies to avoid taxes with the elimination of loopholes and overlaps.

Corporate tax avoidance has shown itself to be a problem in the European Union. Leaked files revealed that some international companies lowered their tax bills to less than one percent of their overall profit last year, while the remaining companies pulled the weight of the tax evasion burden.

Because of this, the European Commission has promised to crack down on these various loopholes and overlaps that may be causing room for discretion. General measures included in the tax proposals include:

• Making corporate taxation fairer across the EU’s 28-nation single market
• Plans for a common consolidated corporate tax base
• Plans for adopting the Organization for Economic Cooperation and Development’s tax recommendations on base erosion and profit shifting

Ideally, the commission says it would like European Union nations to approve their plan by the end of this year so it can take effect at the start of 2016. They have confidence that they will present a taxation action plan before the summer to be approved in a timely manner.

Learn more in the Accounting Today article, EU Seeks to Stamp Out Tax Loopholes So Firms Pay Fair Share.