Insurance Europe has responded to an EC questionnaire on proposals for its BEFIT initiative, which aims to establish a common corporate tax system in the EU.
Insurance Europe supports the EC’s aim of simplifying the determination of taxable income and to reduce compliance costs for companies operating cross-border. Similarly, Insurance Europe supports any measure designed to counter aggressive tax planning and tax avoidance.
Insurance Europe welcomes the intention to build BEFIT based on a consolidated approach. It is only through consolidation that companies’ cross-border activities within the EU can be recognised, which in turn reinforces the European Single Market. At the same time, to achieve this objective, BEFIT should be accompanied by rules allowing cross-border VAT groupings.
Insurance Europe considers that an informed view on the calculation of the tax base could be developed only after a thorough assessment of the impact of the GloBE reform from the OECD two-pillars initiative. BEFIT should be established as a mandatory initiative only once in-scope groups have been able to assess whether the drafted rules add an extra layer of compliance requirements to existing local and global applicable rules for determining a corporate tax base.