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Luxembourg: European Commission Wants a Unified Tax Rulebook for Companies: Is It Realistic?
On 19 May 2021, the European Commission released a Communication, “Business taxation for the 21st Century”.
On 19 May 2021, the European Commission released a Communication, “Business taxation for the 21st Century”, which sets out both a short-term and a long-term vision, ostensibly to support Europe’s recovery from the COVID19 pandemic and ensure adequate public revenues over the coming years.
One of the biggest and most ambitious proposals included in the Communication is the “Business in Europe: Framework for Income Taxation” (“BEFIT”) which the Commission intends to present by 2023. BEFIT would introduce new corporate tax rules applicable in all EU Member States for determining the corporate tax base of companies and allocating their profits among the EU Member States. BEFIT would also allow groups to file one single EU tax return. In the shorter term, the European Commission intends to present a proposal for the publication of effective tax rates paid by large companies, EU rules to neutralise the misuse of shell entities for tax purposes, recommendations on the domestic treatment of losses and a proposal creating a Debt Equity Bias Reduction Allowance. That’s a
lot for one communication!
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Coronavirus | Corporate Profit Tax | Corporation Tax | COVID-19 | EU | European | Luxembourg | Pandemic