16th February 2014

Economic Policy: EC to go after corporate tax avoidance

During a Competition Forum in Brussels, Commissioner Joaquín Almunia said the Commission would investigate certain Member States´ corporate tax legislations. Some recent corporate tax laws modifications by Member States have led to legal tax avoidance by corporations. As corporations profit from these modifications, they could be assessed as state aid illegal under EU competition law, Almunia stated. The Member States could therefore be held responsible by the Commission. Corporate tax avoidance has been a frequent issue and the current Almunia´s words confirm the EC´s determination to stop it. Last November, a proposal on new tax rules concerning parent-subsidiary firms was published, which should stop the current practice of  letter-box subsidiaries in favorable states being set up for tax avoidance. Irish, Luxembourgish and Dutch corporate tax systems are currently being investigated. Tax avoidance deforms the Single Market and is socially untenable, the Commissioner added to conclude.

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Members of the American Chamber of Commerce in the Czech Republic