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Fair & Simple Taxation: Commission Proposes New Package of Measures to Contribute to Europe’s Recovery and Growth

24 July 2020

Taxation, Europe, EU Tax, International Tax

The 15th of July marked the day that the European Commission adopted an ambitious new Tax Package to ensure that Europe’s economic recovery plan and long-term growth. The Program is built on two foundations of justice and convenience. Fair taxation is a high priority for the European Commission as a way of maintaining public funds, and will play a significant part in the EU's economic development in the near term and in the long term.

 

The Plan aims to improve tax justice by stepping up the battle against tax fraud, curtailing unfair tax competition and rising tax transparency. At the same time, it emphasizes on simplifying tax laws and practices, strengthening the landscape for companies across the EU. It involves eliminating tax hurdles and regulatory costs for businesses in many industries, making it easier for corporations to survive and expand in the Single Market.

 

Today's Tax Program consists of three distinct but related initiatives:

  • The Tax Action Plan lays out 25 different measures to make taxes smoother, simpler and more suited to the real economy in the near future. Such steps would make life easier for conscientious taxpayers by eliminating obstacles at any level, from registration to filing, payment, authentication and dispute resolution. The plan of action would allow EU members to exploit the power of data and emerging technology, to further combat tax evasion, to strengthen enforcement and to reduce administrative burdens.
  • The proposal on administrative cooperation (DAC 7) Extends EU tax accountability regulations to online platforms such that those who earn income from the selling of goods or services on websites must pay their fair share of the tax. This new initiative would ensure that Member States immediately share specifics on the revenues created by online web vendors. The plan further improves and clarifies the laws in other ways where Member States work together to counter tax fraud, for example by joint tax audits.
  • The Communication on tax good governance aims at fostering fair taxes and opposing unfair tax competitiveness, both within the EU and globally. To this end, the Commission is recommending a revision of the Code of Conduct covering tax fairness and tackling inappropriate tax practices within the EU. This further recommends changes to the EU registry of non-cooperative nations dealing with non-EU countries that fail to comply globally agreed standards. To date, this has motivated third countries to follow good governance tax practices, but more needs to be achieved. The Communication further highlights the EU commitment to collaborating with developing countries regarding taxation in accordance with the 2030 Sustainable Development Agenda.

 

The Tax Plan is the first part of the EU 's detailed and aggressive tax program for the coming years. The Commission will also focus on a new approach to corporate taxes for the 21st century, resolving the complexities of the technological society and ensuring that all multinationals pay their fair share. In the scope of the Green Deal, the Commission must make recommendations to guarantee that taxes meets the EU's goal of maintaining climate stability by mid - century. This multi-faceted approach to tax reform in the EU aims to make taxes fairer, greener and fit for the modern economy, thus leading to long-term, sustainable and equitable growth.

 

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