BRATISLAVA, March 17, (WEBNOVINY) – The European Commission has proposed a common system to calculate tax base for companies conducting business in the European Union. The concept aims at a profound reduction of the administrative load, costs related to observance of laws as well as to lower legal uncertainty companies presently face since 27 national systems govern the determination of taxable profits.
The so-called Common Consolidated Corporate Tax Base would enable the use of a uniform contact center. Moreover companies would be able to consolidate their profits and losses generated across the 27-nation bloc, the Representation of the European Commission in Slovakia reported.
Member states would maintain the privilege to set tax rates for income of private individuals. The new system would be voluntary for companies. This means that firms that might capitalize on the new system could join it, while other companies would continue to use the national system of the given country.
The Finance Ministry of the Slovak Republic provided a statement to SITA newswire, according to which they can imagine a discussion on the common tax base for companies. But the new system must not slim down the tax base, says Finance Minister Ivan Miklos. “We are able to talk about it unless we have to worsen the Slovak tax system, narrow our tax base and increase rates. At the same time, there is the threat that the common tax base would bring closer tax rate harmonization, a move that would be unfortunate for the whole of Europe,” Miklos asserted.
The proposal would see the development of a common system for calculating the tax base for firms operating across the EU, offering them a ‘one-stop shop‘ for filing returns and simplifying what counts as profits and losses rather than having to deal with up to 27 different tax regimes. The tax base would be than divided according to a specific formula among those member states, where the taxpayer conducts its activities.
SITA