Starting on January 1, the countries of the European Union will be able to tax the profits artificially diverted by companies from one country to another to avoid taxes, with the entry into force of regulations to combat the aggressive tax engineering of multinationals.
The rules will provide member states with new tools in that area and, according to the European Commissioner for Economic Affairs, Pierre Moscovici, will be an important step in the fight against aggressive tax planning.
"We have not won the fight yet but the new rules mark a very important stage in our fight against those who try to exploit the loopholes of the tax systems of our member states to avoid billions of euros of taxes," the commissioner said. a statement.
The Tax Avoidance Directive sets a set of measures that all EU countries should apply against some of the most aggressive tax planning practices.
In the first place, it establishes a rule to dissuade a multinational company from deriving the benefits obtained by its parent company in a state with high taxation to subsidiaries in countries that enjoy a more benevolent tax regime.
To allow governments to tax artificially deviated benefits, the legislation includes a mechanism that will be activated when the effective tax rate of the country where the subsidiary is located is less than half that of the member state concerned.
Second, the interest limitation rule will be applied to dissuade companies from creating artificial debt.
Currently, interest payments are usually deductible, which means that some companies structure their loans in such a way that the debt is concentrated in subsidiaries located in countries with the highest taxation, where the payment of interest can be discounted from the invoice.
With the new rules, deductible interests will be limited, based on a fixed percentage of benefits.
The regulation also includes mechanisms to prevent companies from benefiting from inconsistencies between national laws, as some companies take advantage of existing gaps to obtain tax deductions in different countries or a deduction in a country for an income for which they have not paid taxes in another.
Likewise, the regulations provide for provisions against aggressive tax planning in general, which may be applied by the authorities when they believe they are dealing with a case of artificial tax engineering, but they could not fit the practice in any of the previous cases.
This legislation is part of the international initiative promoted by the Organization for Economic Cooperation and Development (OECD) and the G20 on the Erosion of the Basis of Imposition and Transfer of Benefits (BEPS, in English), which guides the efforts in the fight against tax evasion.
In recent years, transparent rules have been put into effect in the EU so that countries have information against companies that do not pay their corresponding share of taxes.
The EU is also working to get its international partners to apply rules against tax evasion and the European Commission has proposed reforming the corporate tax to review the taxation of multinationals in the Twenty-eight.