EU Common Corporate Tax rules are coming....

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Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
The initial plan is for multinationals but I can see where this is going ca#"!.

Your gonna end up with a company based in Ireland lets saying paying the new 15% corporate tax rate. But then if this new rule comes in and all their customers are in France that year they would in principle be subject to a 25% French corporate tax rate due to the apportionment of income to Frances corporate tax rate...lol. It sounds fair on paper but you could end up in a situation where you have no idea what your tax rate is gonna be each year....lol.




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Action 5: Business in Europe: Framework for Income Taxation (BEFIT)

BEFIT will provide for common rules for determining the corporate tax base and for the allocation of profits between Member States, based on a pre-defined formula (formulary apportionment). The proposal will build on the principles agreed upon under Pillar 1 and Pillar 2, and further adapt these to ensure suitability for an extended use within the EU Single Market.

In short, BEFIT would consolidate the profits of the EU members of multinationals into a single tax base, to be subsequently allocated to Member States using a formula that will replace the current transfer pricing rules. The formula will be developed by considering issues such as giving appropriate weight to sales by destination, reflecting the importance of the market where a multinational group does business, assets (including intangibles) and labor (personnel and salaries). Once allocated, profits will be taxed using the common principles of an EU corporate tax base.

The pending Common Consolidated Corporate Tax Base (CCCTB) proposal will be withdrawn in light of this new initiative. Once implemented, BEFIT could represent a stepping stone for the introduction of an even more ambitious initiative, i.e. the possibility of a single EU corporate tax return for a group.

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menzu

CEO - Sifr.com
Mentor Group Gold
Hopefully CH will not fall for this idiocracy

Just like CH failed to maintain its neutrality with Russia/Ukraine (soon China/Taiwan), it will succumb to this as well, they are literally cornered.

I think we will see some major countries leaving the EU, Italy for example has chances of leaving the bloc.
In regards to taxation, small nations will become attractive by not participating in these agreements.
 

Offshr

New member
Just like CH failed to maintain its neutrality with Russia/Ukraine (soon China/Taiwan), it will succumb to this as well, they are literally cornered.

I think we will see some major countries leaving the EU, Italy for example has chances of leaving the bloc.
In regards to taxation, small nations will become attractive by not participating in these agreements.
No countries would leave the EU as without single market they quickly will go down to recession.

The initial plan is for multinationals but I can see where this is going ca#"!.

Your gonna end up with a company based in Ireland lets saying paying the new 15% corporate tax rate. But then if this new rule comes in and all their customers are in France that year they would in principle be subject to a 25% French corporate tax rate due to the apportionment of income to Frances corporate tax rate...lol. It sounds fair on paper but you could end up in a situation where you have no idea what your tax rate is gonna be each year....lol.




----- quote start

Action 5: Business in Europe: Framework for Income Taxation (BEFIT)

BEFIT will provide for common rules for determining the corporate tax base and for the allocation of profits between Member States, based on a pre-defined formula (formulary apportionment). The proposal will build on the principles agreed upon under Pillar 1 and Pillar 2, and further adapt these to ensure suitability for an extended use within the EU Single Market.

In short, BEFIT would consolidate the profits of the EU members of multinationals into a single tax base, to be subsequently allocated to Member States using a formula that will replace the current transfer pricing rules. The formula will be developed by considering issues such as giving appropriate weight to sales by destination, reflecting the importance of the market where a multinational group does business, assets (including intangibles) and labor (personnel and salaries). Once allocated, profits will be taxed using the common principles of an EU corporate tax base.

The pending Common Consolidated Corporate Tax Base (CCCTB) proposal will be withdrawn in light of this new initiative. Once implemented, BEFIT could represent a stepping stone for the introduction of an even more ambitious initiative, i.e. the possibility of a single EU corporate tax return for a group.

----- quote end
Would it be applicable to private asset holding business one day?
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Would it be applicable to private asset holding business one day?

It will apply to all businesses doing EU cross border business eventually I feel. Just think EU VAT MOSS system and you get the picture :(.

Multinationals will figure out something as always.
It is the commoners who will suffer the most, as always.

Yes they 100% will. Lets be clear this plan will affect mostly US big tech companies i.e FB, TWT, AMZ, GOOGL, APPL, MSFT etc that have complex tax affairs in EU. It may also cause tensions like when France tried to implement the tech tax below.

 

marzio

Mentor Group Gold
Brexit was painful but if EU will follow this path and UK will get rid of that idiot that wants to rise corporate taxes, it will pay off in the long run. No DAC6 and no BEFIT would be enough of a compelling reason to settle there.
 
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