Today, the European Commission presented a long-awaited SME relief package including legislative reforms to fight tax avoidance when doing business in Europe. Specifically, it contains a package of three directives on taxation, called Business in Europe: Framework for Income Taxation (BEFIT).

Jonás Fernández MEP, S&D spokesperson on economic and monetary affairs, said: 

“We welcome this package as it partially answers a longstanding demand from the Socialists and Democrats to harmonise the tax base for corporate income tax. This is necessary to ensure a common rulebook that would ease the life of companies by alleviating administrative burden and significantly reduce tax avoidance. 

“We believe there is room for levelling the ambition and simplifying the corporate tax codes inside the Union, notably by halting a damaging competition in tax incentives and ensuring a fairer distribution of revenues between EU countries. With appropriate harmonisation, companies would no longer be able to avoid taxes by abusing gaps between different national legislations within the EU.”

Aurore Lalucq MEP, S&D spokesperson on taxation, added:

“The main challenge of these new proposals will be - again - the hurdle of unanimity. The Commission already proposed to harmonise the rules twice, in 2011 and in 2016. Neither proposal received unanimous support, notably due to the resistance of some EU tax havens. 

“We urge EU member states to act responsibly and stop blocking progress on tax policy, as we urgently need it. Europeans demand tax justice and they will assess our work in nine months at the European elections. This is an important test to see which governments are committed to fight tax avoidance.

“For the past decades, the EU has proven unable to introduce ambitious tax reforms, apart from tax transparency and transposing global deals. A lack of progress on this front would once again prove the need to move away from unanimity when it comes to tax affairs.”