The European Commission welcomes two breakthrough agreements reached by the Council today towards combating corporate tax avoidance and aggressive tax planning. The Council has given its political backing to the anti-abuse clause of the Parent Subsidiary Directive and to the mandatory exchange of information between EU tax authorities.
"I applaud the two milestone decisions taken by Finance Ministers today, which open up a new front in our fight against corporate tax avoidance and aggressive tax planning," said Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs.
As a follow-up to the Action Plan against tax evasion and tax fraud of 6 December 2012, the Commission proposed to amend the Parent Subsidiary Directive on 25 November 2013 to introduce a mandatory anti-abuse provision. The new 'de minimis' anti-abuse clause will allow Member States to put in place stricter or more specific domestic provisions or double tax treaty anti-abuse provisions. An earlier amendment, in July 2014 (Directive 2014/86), already addressed loopholes related to hybrid loans, while the anti-abuse clause was agreed today.
"The agreement on the anti-abuse provisions of the Parent-Subsidiary Directive ensures a level-playing field for honest businesses in the EU's Single Market and it closes down loopholes that could be exploited for aggressive tax planning", said Commissioner Moscovici.
EU Finance Ministers also took a final political decision on the automatic exchange of information between the tax authorities of the EU's 28 Member States. "This decision will ensure that the widest possible scope of automatic exchange within Europe is applied," Commissioner Moscovici said.
The Commission had proposed a revision to the Administrative Cooperation Directive in June 2013 as part of its drive to further increase tax transparency in Europe. The revision is also a direct response to the new Global Standard on automatic exchange of information agreed by G20 Finance Ministers in February 2013, which aims to ensure full tax transparency and cooperation between tax administrations worldwide in fighting tax evasion.
"Current events require us to step up our efforts against corporate tax avoidance and aggressive tax planning on all fronts", Commissioner Moscovici affirmed. "We are committed to pushing through this agenda as rapidly as possible. To this end, we confirm our commitment to extend the automatic exchange of information to tax rulings, with a legal proposal to be presented in early 2015."