Anti tax avoidance efforts have to be global

Due to the tax avoidance practices, European treasuries are short of billions of euro. For that reason, the European Commission proposed its Anti Tax Avoidance Package on 28th January 2016. The main goal of the initiative is to harmonize tax regulations in the EU Member States in order to effectively and efficiently fight against aggressive tax practices of multinational corporations, increase transparency among the Member States and ensure fair competition for all the businesses in the EU.

Whether the package will really prevent transfer of profits to tax havens and what effects it will have on multinationals residing in the Czech Republic was discussed by the representatives of EU institutions, business sector and non-governmental organizations on 31st March 2016 in European House The Digital Single Market (DSM) has a great potential to contribute to economic growth of the EU but remains still fully unexploited. For this reason, one of the Juncker ́s main goals is to eliminate the barriers which prevent free movement of goods and services sold online. One of the barriers to DSM is the geo-blocking which means discrimination on the ground of the geographic location that prevents consumers from their access to products available in other Member State. On 4th April in Prague, the representatives of EU institutions discussed with business and consumers representatives the advantages of abolishing the geo-blocking on the Internal Market and its impact on businesses.

Although the geo-blocking is a significant problem preventing the use of the full potential of DSM, some specific examples show it will be difficult to find a suitable solution which would abolish all barriers and would not limit the rights of business. The participants of in Prague. The debate showed various points of view on the possible harmonisation of corporate taxes in the EU. Speakers of the debate agreed that reaching a consensus among 28 member states will be very difficult. The new package brings several positive measures into the fight against tax avoidance practices. However, in order to succeed, it will be necessary to prevent further complexification of tax administration in order not to create an additional burden for companies and, on the contrary, would not decrease EU competitiveness.

Equally important, nonetheless difficult will be to create level playing field for all the players and implement these measures in a global context and avoid having companies on the markets that would still be able to avoid tax obligations.