The EU’s Action Plan On Corporate Taxation: A Fair & Efficient Approach

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On June 17th 2015, the Commission adopted an Action Plan for fair and efficient corporate taxation in the EU.

Its purpose is to reform the corporate tax framework in the EU with the intention of tackling tax abuse, ensuring sustainable revenues, and supporting a better business environment in the Single Market. The action plan identifies 5 key areas for action:

  1. Re-Launching the Common Consolidated Corporate Tax Base (CCCTB)
  2. Ensuring fair taxation where profits are generated
  3. Creating a better business environment
  4. Increasing transparency
  5. Improving EU Coordination.

In order to increase transparency, the Commission published an EU-Wide list of third country non-cooperative tax jurisdictions, compiled from Member States’ independent national blacklists. The list offers Member States a transparent tool to compare their national lists and adjust their respective approaches to non-cooperative tax jurisdictions as necessary.

The list, featuring 30 countries, includes territories like Andorra, Bahamas, British Virgin Islands, Cayman Islands, Hong Kong, Monaco, Seychelles, and the US Virgin Islands. The purpose behind the publication of the list was to push non-cooperative non-EU jurisdictions to be more cooperative and adopt international standards.

Each country that made it onto the blacklist had been suggested by at least 10 EU Member States. The list helps EU Member States put pressure on commonly recognized tax havens. Pierre Moscovici, European Commissioner responsible for Tax, said: “Our current approach to corporate taxation no longer fits today’s reality. We are using outdated tools and unilateral measures to respond to the challenges of a digitalized, globalized economy.”

The CCCTB measure seeks to harmonize corporate income tax rules among member states to combat aggressive tax avoidance.