The European Parliament's Committee on Economic and Monetary Affairs today adopted Piia-Noora Kauppi's report on Tax Treatment of Losses in Cross-Border Situations. The report urges measures to allow companies belonging to the same corporate group to off-set their losses incurred in another Member State against profits of the head office without delay.
"The difference in tax treatment of branches and subsidiaries in a domestic situation as opposed to a cross-border one affects firms' investment decisions, distorting the smooth functioning of the Single Market and exerting a drag on the European economy", says Kauppi. "The principle of freedom of establishment implies that investments are made according to a real economic advantage. We need to defend this principle, showing an example for third countries as well", she added.
According to Kauppi, the proposal does not affect Member States' tax revenues: "The measures would primarily constitute a move towards a level playing field in making the choice between branches and subsidiaries. They would also allow for loss-relief within the same tax year so that businesses would not have to bear the time risk and credit costs involved in models where off-setting is delayed."
In the report, the Committee also takes a supportive position towards further company tax coordination in the form of common consolidated corporate tax base.
For further information:
Piia-Noora KAUPPI MEP, Tel: +32-2-2845894
Antti Timonen, EPP-ED Press Service, Tel: +32-474-851831
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