EU proposes "business-friendly" unified tax rulebook for companies

FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium May 5, 2021. REUTERS/Yves Herman

BRUSSELS (Reuters) – The European Union’s executive on Tuesday adopted a plan to make the taxation of companies more unified across the bloc’s 27 member states, aiming for an equitable and stable business environment to underpin economic growth and employment.

The European Commission proposed that certain large companies operating in the EU publish their effective tax rates to ensure greater transparency, and also new anti-tax avoidance measures to tackle the abusive use of shell companies.

It said in a statement that its plan will aim to support the EU’s post-pandemic economic recovery by addressing the debt-equity bias in the current corporate taxation, which treats debt financing of companies more favourably than equity financing.

“This proposal will aim to encourage companies to finance their activities through equity rather than turning

to debt,” it said.

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