Brussels is presenting a major tax reform intended to simplify life for businesses and strengthen their competitiveness, with substantial savings to be expected.
The European Commission announced on Wednesday a package of corporate tax reforms, which aims to save them around 8 billion euros per year. This reform is part of a policy of all-out regulatory and administrative simplification, carried out for two years by Brussels to strengthen the competitiveness of European businesses.
Tax and administrative relief
The measures presented on Wednesday notably include an exemption from withholding tax on all cross-border payments of dividends, interest and royalties between companies in the European Union. According to the Commission, they should save businesses a total of 8 billion euros per year, including 3.3 billion in administrative costs.
“Businesses everywhere are demanding a simpler, faster and smarter regulatory environment, to enable them to prosper and be more competitive on the global stage. This is why today we are presenting an ambitious package of measures,” said Economy Commissioner Valdis Dombrovskis. These proposals also include a revision of the European directive against tax evasion, which arouses the fears of certain NGOs.
Shared reactions and a unanimous vote
“We make no compromise on what is essential, preserving essential guarantees against tax evasion and fraud,” assured the Commissioner for Climate and Sustainable Growth, Wopke Hoekstra. Conversely, “while corporate profits are breaking records and inequalities are exploding, after decades of a race to the bottom in terms of corporate taxation, the best response would be to ensure that those who earn the most contribute more than others”, instead of “distributing tax gifts to large companies”, denounced Julien Desiderio, of the Oxfam association.
It also remains to be seen what treatment the countries of the European Union will reserve for these proposals, some of which will require the unanimous agreement of the 27 to be able to enter into force.
