EU finance ministers agree to broaden corporate tax measures

The revision of the code, the first since 1997, means that member states will widen the scope of the tax measures examined when examining harmful tax practices in the EU.

EU finance ministers agreed on November 8 on a revised code of conduct for corporate taxation to identify and limit harmful tax measures by member states.

“The ultimate goal is to fight harmful tax competition and tax evasion in the EU,” says a press release issued by the Council of the EU.

The main task of the Code of Conduct Group has been to detect and eliminate harmful tax measures in EU Member States since 1997. The revision of the Code, the first since 1997, means that Member States will broaden the scope of tax measures under scrutiny when considering harmful tax practices within the EU.

“The update to the code took the form of a resolution of the Council and of the representatives of the governments of the Member States, meeting within the Council, on a revised code of conduct for business taxation,” the statement said.

The revised code of conduct notably introduces the concept of tax measures of general application. Whereas previously only preferential measures (such as special regimes or exemptions from the general tax regime) were examined, the scope of the new rules will also include tax elements of general application. These will be considered harmful if they lead to double non-taxation or the double or multiple use of tax advantages.

The revised code of conduct further clarifies the review process within the code of conduct group, which is responsible for administering the code.

Zbyněk Stanjura, Minister of Finance of the Czech Republic, said: “Our tax experts are constantly looking for harmful tax practices. Since the start of its work in 1997, the Code of Conduct Group has succeeded in eliminating around 140 harmful tax practices in the EU. The Code of Conduct for Business Taxation has not been amended since 1997 and today’s agreement further improves its effectiveness also in light of recent international tax reform.

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