New European measures against tax avoidance approved

The Ecofin Council, at which the Ministers of Finance of all European countries have a seat, has reached an agreement on a new directive against the avoidance of taxes and on the criteria for a tax havens blacklist. “The international backdoors are finally being closed,” notes Minister of Finance Johan Van Overtveldt with satisfaction. “We cannot tolerate a situation in which citizens and smaller enterprises obediently pay their taxes while others avoid taxes through bleeding-edge fiscal technology.”

According to Johan Van Overtveldt, Belgium played a very active role in the development of the new directive. It is intended to avoid one and the same cost being fiscally deductible in two countries, also outside the EU. Or that a cost is deducted in country A without the income being taxed in country B. “The possibilities for abusing various legislations are being severely limited,” says Johan Van Overtveldt. “And indeed this is an important measure in the context of more fiscal justice.”

Blacklist

It was already possible for countries that do not cooperate in terms of transparency and tax practices to land up on a blacklist on the basis of three criteria: transparency, fair taxation and meeting the OECD The Organisation for Economic Cooperation and Development (OECD), established in 1961 as a result of the Marshall Plan, is a cooperation agreement between 34 countries in order to study and coordinate social and economic policy. The member countries try to solve their problems jointly and to mutually align their international policy. The organisation also collects statistical information to make comparative analyses. These OECD analyses are a valuable basis for the N-VA to test policy against itself or even to give shape to it. OECD guidelines. The Ecofin Council has now also set out what the “fair taxation” part means in black and white: in the case of a so-called zero tax rate in company tax, an extensive investigation will from now on be set up into the real activities of companies in potential tax havens. Johan Van Overtveldt has long been a proponent of clear and objective criteria for defining harmful tax regimes and unfair fiscal competition. “I am delighted that these have now been spelled out. I would mention, however, that Belgium is already using stricter criteria right now, and we will continue to do so. For example, we have a tougher requirement for minimum taxation: 10% and 15% instead of 0%. So in that area too we are setting a good example in the battle against tax avoidance,” the Minister of Finance concludes.