The Commission considers that there is a need to ensure that the burden of taxation is shared fairly in line with the choices made by individual governments. Currently, some taxpayers may use complex, sometimes artificial, arrangements which have the effect of relocating their tax base to other jurisdictions within or outside the Union. In doing this, taxpayers take advantage of mismatches in national laws to ensure that certain items of income remain untaxed anywhere or to exploit differences in tax rates. By paying taxes businesses can have an important positive impact on the rest of society. Aggressive tax planning could thus be considered contrary to the principles of Corporate Social Responsibility[12]. Therefore, concrete steps are needed to address the problem.
Concrete action by all Member States intended to remedy such problems would also improve the operation of the internal market. In the light of this, the Commission recommends that Member States take common effective action in this field.
Specifically, Member States are encouraged to include a clause in Double Tax Conventions (DTCs) concluded with other EU Member States and with third countries to resolve a specifically identified type of double non-taxation. The Commission also recommends the use of a common general anti-abuse rule. This would help to ensure coherence and effectiveness in an area where Member State practice varies considerably.
The EU tax Directives (Directives on Interest and Royalties, Mergers and Parent-Subsidiary) already allow Member States to apply anti-abuse safeguards. While respecting the EU law, Member States can use these possibilities to avoid abusive tax planning.
Furthermore, the Commission is willing to contribute to work in international tax fora such as the OECD to address the complexities of taxing electronic commerce by developing appropriate international standards.
