Establishing a Head Office Tax system for SMEs (HOT) - Related Opinions

In this own-initiative opinion the EESC supports the Commission’s plans to achieve simplification, reduce the administrative burden and enhance the competitiveness of the European economy. The Committee considers that tax simplification should promote giving cost-efficient information, improving the use of and exchange of information between tax authorities. The Committee recommends that an impact assessment should be undertaken for every proposal in order to properly assess the concrete implications for taxpayers and companies of new legislative initiatives. Furthermore, the Committee also recommends conducting competitiveness checks of new legislative initiatives in the field of taxation, including for SMEs, to ensure that the new rules actually support the planned objectives of the Commission in terms of simplification, decluttering and reduction of the administrative burden. Finally, the EESC proposes that a system of advance rulings at EU level be introduced.

The EESC stresses that the rise of cross-border teleworking pose challenges to the international taxation systems and invites the Member States and the European Commission to work together to find solutions for the new situation. The Committee encourages the European Commission to consider whether a one-stop shop, like in the VAT area, could be set up for cross-border teleworkers to allow the employees and employers to reduce tax disputes and help to ensure that taxes are levied correctly.

The EESC fully supports the Commission proposal on the misuse of shell companies for tax purposes and its objectives. Ensuring an effective, fair taxation across the single market is crucial to favour a real recovery after the COVID-19 pandemic. The Committee supports the choice of a Directive aimed at ensuring a common legal framework among Member States. The nature of the subject matter to be regulated and the objectives pursued means that they cannot be handled through single initiatives by Member States in their respective legal systems.

The EESC welcomes the Commission initiative for the strategy on business taxation in the 21st century. The EESC strongly supports and appreciates the fact that the Commission is aligning its work with the international discussions and agreements and encourages the Commission to pursue its Action Plan for Fair and Simple Taxation Supporting the Recovery Strategy. The EESC is calling for uniform and globally concerted and coordinated implementation of Pillars 1 and 2 of the OECD agreement.

The EESC expresses its support for the Commission in combating the erosion of Member States' tax bases and unfair tax competition. The Committee in this context endorses the introduction of a CCCTB and is also pleased that the Commission has published a list of non-cooperative tax jurisdictions. The EESC goes even further and proposes that EU rules should include sanctions for companies that continue to run their business through tax havens.