European banks, actively supporting international measures to fight tax evasion, broadly welcome new European Union measures against corporate tax avoidance on which finance ministers reached agreement.
The European Banking Federation (EBF) underlines the importance for EU Member States to aligning these measures with the international actions that are being developed in the context of the Organisation for Economic Cooperation and Development (OECD).
The EBF fully supports a coordinated and coherent EU implementation of the OECD Action Plan on Base Erosion and Profit Shifting (BEPS) which aims to tax business profits where value is created, however, the Anti-Tax Avoidance Directive (ATAD) which EU Finance Ministers have now agreed risks creating distortions because it departs from the BEPS recommendations made by the OECD.
European banks play a central role in the implementation of standards and measures that fight tax evasion and prevent double non-taxation and double taxation.
The EBF is particularly concerned by the limit on interest deductibility which EU ministers adopted before the OECD has fully considered how this measure should be applied to banking groups.
The EU’s anti-tax avoidance directive also does not provide proper dispute resolution mechanisms which are designed to avoid unintended consequences such as double taxation.
Given that this new legislation may have an important impact on the investment climate in the EU, the EBF would support a thorough impact assessment at EU level.
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