In a long-awaited ‘Communication on business taxation in the 21st century’, the European Commission announced, most notably:

• a legislative proposal, to be published next year, for the publication of effective tax rates paid by large companies.
  
• a legislative proposal setting out union rules to neutralise the misuse of shell entities for tax purposes, to be published before the end of this year.
• a legislative proposal in 2023 for a new framework entitled BEFIT (‘Business in Europe: Framework for Income Taxation’ with the aim to provide a single corporate tax rulebook for the EU by minimising tax avoidance opportunities in the Single Market. BEFIT would replace its proposal for a Common Consolidated Corporate Tax Base, which has been stuck in the Council for long and will be withdrawn.

In a first reaction, CESI Secretary General said: “As a trade union umbrella organisation representing workers across Europe, and as a voice of tax unions, we have stressed for long that forms of taxation other than on labour need to be effective and fair, too. Also the business sector needs clear rules for fair and adequate taxation without loopholes. The European Commission’s plans are a very positive and important step in the fight against corporate tax evasion and avoidance which continues to be too persisting.”

He added: “As an organisation representing public section unions, we have made it clear in the past, not least through our membership in the European Commission’s Platform for Tax Good Governance, that effective and fair taxation of business is indispensable to finance sustainable and performing public services, which serve especially the most vulnerable members of society which cannot buy in substitutive private services. Especially in times of the unprecentended crisis that we face as a result of the Covid pandemic, business needs to play its part in contributing adequately to much needed public tax revenues.”

Romain Wolff, CESI President and CESI representative to the Platform on Tax Good Governance, concluded: “The plans of the European Commission are encouraging. The proposals that the European Commission is going to table will however also need to be adopted by the Council. With unanimity voting in the area of taxation, this will require an effort which I hope will be successful. We have emphasised in the past that the European Commission should seriously attempt to push through a passerelle clause which the Treaties offer in order to move to qualified majority voting in this policy field. This would make it much more likely that ambitious plans also become ambitious legislation.”

CESI’s comprehensive set of demands for effective and fair business taxation are available here. CESI’s position on a possible majority voting in the Council can be accessed here.