Underpinning the EU Commission’s Tax Reform agenda is a deep sense of unease that companies are not contributing sufficiently to the tax coffers of the countries where they operate. Commissioner Moscovici’s proposals were long on aspiration, but short on evidence.

EU Member States compete on corporate tax policies. Countries compete to have businesses located in their jurisdictions, either by ensuring indigenous business continues in operation, or attracting in foreign direct investment. The Moscovici proposals, if brought to fruition, would end such competition.

Implicit in the Commission’s proposals is a criticism of member state company tax policies and also the conduct of their revenue authorities. This is scarcely justified, and arguably not the Commission’s role. The Commission does acknowledge that the proposals are a “relaunch” of a device known as the Common Consolidated Corporate Tax Base (CCCTB) – a methodology for calculating and then distributing the profits of multinational groups across European Member States.

The term “relaunch” suggests that the device can float. But it hasn’t up to now. The initial CCCTB idea has been around for at least a decade, and even made it to becoming a legislative proposal in the form of a draft directive in 2011. That draft directive was not acceptable to the EU member states.

The Commission needs to assemble better evidence for the scope of the problem it is trying to solve, and more innovative policies.