Last month saw the Commission presented us with yet another package aimed at stamping out tax avoidance and harmful tax competition. One of the key proposals of this package is an automatic exchange of tax rulings between Member States. Chartered Accountants Ireland commented on these proposals to RTE on Thursday 19 last.

According to Pierre Moscovici, Commissioners for Economic and Financial Affairs, Taxation and Customs, “Tolerance has reached rock-bottom for companies that avoid paying their fair share of taxes, and for the regimes that enable them to do this”. The Commission is of the view that companies use the combination of complex tax rules along with the lack of cooperation between Member States to their advantage in order to shift profits and reduce taxes.

This proposed package would see Member States having to exchange tax rulings every three months. Tax authorities would be required to send a small report to all other Member States on all cross-border tax rulings which they have issued. Where in the past Member States had discretion with regards to the sharing of tax rulings, this discretion will be replaced with an obligation to share if this proposed tax package goes ahead.