The European Commission, on 6 December 2012, presented an Action Plan for a more effective EU response to tax evasion and tax avoidance. The Plan sets out a comprehensive set of measures, to help EU Member States, now and in the future, protect their tax bases and recapture billions of euros legitimately due.
One of the European Commission's recommendations is on Aggressive Tax Planning. It suggests ways to address legal technicalities and loopholes which some companies exploit to avoid paying their fair share. EU Member States are encouraged to reinforce their Double Taxation Treaties to prevent them from resulting in no taxation at all. They should also adopt a common General Anti-Abuse Rule, under which they could ignore any artificial arrangement carried out for tax avoidance purposes and tax instead on the basis of actual economic substance.
Among other EU Member States, the Netherlands welcomes the attention given by the European Commission to the prevention of tax evasion and tax avoidance. The Netherlands especially welcomes the recommendations on reinforcement of Double Taxation Treaties, particularly as these already form part of the country's policy in respect of the conclusion of Double Taxation Treaties. In this context the Netherlands State Secretary of Finance also concluded that tax evasion and tax avoidance are international problems that can only be solved at an international level. He emphasised that the Netherlands will not act in anticipation of any international agreements in order to remain one of the most attractive countries to establish a company. Some reasons why companies find the Netherlands attractive include the preferential Netherlands tax regime and extensive network of Double Taxation Treaties.
Click here to read the European Commission's press release
More recently, the OECD commissioned by the G-20, published a report on 12 February 2013 on Base Erosion and Profit Shifting, which addresses the desire for tax systems that do not unduly favour multinational enterprises, leaving citizens and small businesses with larger tax bills. In the coming months, the OECD will draw up an Action Plan, developed in cooperation with governments and the business community, which will provide concrete timelines and methodologies for solutions to reinforce the integrity of the global tax system.
Click here to read the OECD's press release.