EU takes action on corporate tax avoidance

European Commission on Wednesday presented new strategy to fight with corporate tax avoidance.

The so called "Action Plan" sets out a series of initiatives to tackle tax avoidance. It is mainly to regulate and make it tougher for multinational companies to take advantage of legal loopholes and avoid paying tax in the European Union (EU), according to the Commission.

"It is unacceptable that certain multinationals make large profits in the EU but pay little or no tax inside our borders. This goes against even the most basic idea of fairness, it is unacceptable," said Pierre Moscovici, EU commissioner in charge of Economic and Financial Affairs, Taxation and Customs.

Key actions include to re-launch the common consolidated corporate tax base, namely harmonizing of tax rates across the EU after its previous attempt stalled in 2011.

Another proposal order companies who benefit from the EU's single market to pay a fair level of tax to the country where they make profits.

"Some member states have taken unilateral anti-abuse action in an effort to enforce this principle but purely national measures against cross border avoidance can cause more problems than they solve so we believe and I believe that a common approach is essential," Moscovici said.

The Commission will also launch a public consultation on whether companies should have to publicly disclose certain tax information, including country-by-country reporting. Endit