Off the wire
• Security forces detain son of key ETA leader in Paris  • EU launches public consultation on ties with African, Caribbean, Pacific nations  • French stock market index up 0.95 pct  • U.S. military commander admits Afghan hospital "mistakenly struck" by airstrike  • Hungary's first post-communist president Arpad Goncz dies at 93  • China-Africa health forum adopts Cape Town Declaration  • G20 urges reforms for global trade growth  • Tax evasion charges against Leo Messi are dropped  • EU vows to continue transatlantic data flows without "Safe Harbour"  • Foreign exchange rate of Euro to other currencies  
You are here: 　 Home

EU improves transparency rules on cross-border tax

Xinhua, October 7, 2015 Adjust font size:

The Economic and Financial Affairs ministers of the European Union (EU) member states reached a political agreement on the automatic exchange of information on cross-border tax rulings on Tuesday.

The ministers' meeting in Luxembourg unanimously agreed on a directive aimed at improving transparency in the assurances given by member states to companies about how their taxes are calculated, an EU statement said.

The directive is one of a number of EU initiatives aimed at preventing corporate tax avoidance. It will require member states to exchange information automatically on advance cross-border tax rulings, as well as advance pricing arrangements.

The European Commission welcomed the decision in another statement, saying "the new rules should lead to greater cooperation between member states on tax matters and act as a deterrent from using tax rulings as an instrument for tax abuse."

Following the announcement of the agreement, European Commission President Jean-Claude Juncker said "the current system of corporate tax rules is unjust and unfit for purpose. There is a plethora of national rules that allows some companies to win, while others lose out. This unfair competition is anathema to the principles of fair competition within our internal market."

The European commission said all EU member states will be equipped with the information they need to protect their tax bases and effectively target companies that try to escape paying their fair share of taxes.

"The automatic exchange of information on tax rulings will provide national authorities with insight on aggressive tax planning. It marks a leap forward in our efforts to advance on tax coordination and tax harmonization," Juncker added.

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said the agreement was an important signal that EU member states are ready to deliver on common goal of fair and effective taxation.

"The EU will continue to work to implement these transparency rules worldwide," he noted.

According to the agreement, EU member states will have to transpose the new rules into national law before the end of 2016, meaning that the Directive will have to be applied from Jan. 1, 2017. In the meantime, existing obligations to exchange information between member states will stay in place. Enditem