On 18 March, the European Commission published its new plan to tackle tax avoidance. At the heart of this Tax Transparency Package stands a proposal to amend the existing measures on information exchange among national tax authorities with a new automatic information exchange mechanism. Today, the Commission says, big multinationals profit from the complexity of different tax regimes to construct extremely complex networks of interconnected subsidiaries in several member states and then asking for favorable tax rulings in certain states. This can allow them to tax the activities of the whole network with ridiculously low effective rates. One of the reasons is that member states simply do not share the information on all tax rulings they issue, even though they can, because they do not know that some specific tax ruling may be relevant for the tax authorities in another member state. According to the Commission´s proposal, tax authorities would be obliged to send a list of all tax rulings they issue every 3 months to all fellow national tax authorities. Of course, if one tax authority would require more elaborate information on a specific tax ruling, the fellow authority would be obliged to provide it.
Together with this measure, the Commission will consider other actions, including the possibility to require some big multinationals to publish certain tax-related data. The legislation on taxes is adopted by the Council, while the European Parliament is only consulted. The Commission would like to see the package adopted before the end of this year.
6th October 2021
9th July 2021