European Commission Announces Economic Recovery Plan
Digital tax matters were on the table for the European Commission, which has published an economic recovery plan (as part of its response to the coronavirus pandemic), which includes a possible digital tax, a crackdown on tax fraud, in addition to revisiting its proposals for a common consolidated corporate tax base.
The Commission intends to borrow EUR750bn on the financial markets to fund the package. To repay these funds, the Commission will propose a number of new “own resources.”
According to the EC plan, options for reform could include a new digital tax on companies with global annual turnover over EUR750bn, which could raise an estimated EUR1.3bn per year, and a Carbon Border Adjustment Mechanism, which could take the form of a tax on imports to the European Union that do not face environmental levies equal to the EU’s in their country of origin.
The Commission also announced its intention to “step up the fight against tax fraud,” in an effort to ensure that “solidarity and fairness is at the heart of the recovery” and to help EU member states generate the tax revenue needed to respond to the current crisis, and additionally returned to the proposal for a Common Consolidated Corporate Tax Base (or CCCTB), which it argued “would provide business with a single rulebook to compute their corporate tax base in the EU.”
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look