Austria's SPÍ Proposes EU Tax Enforcement Actions
Wednesday, May 7, 2014
The Austrian Social Democrat party, led by Chancellor Werner Faymann, has
unveiled a five-point plan to combat tax evasion in the European Union through the introduction of tougher rules to tackle profit shifting to
First, the SPÍ called on the EU to clamp down on profit shifting by limiting
the tax-deductibility of interest and royalty payments made to related parties, which it said should be
based on the Austrian model. New rules, applied in Austria since March 1, no
longer allow deductions when the income of the recipient company is taxed at
an effective rate of less than 10 percent.
Next, the party urged EU member states to apply the latest international tax
regulations to prevent double non-taxation, particularly in the area of intellectual
property and digital assets.
It said that the automatic exchange of information (AEI)
in tax matters should be applied to all financial products, including dividends,
and not just restricted to bank account interest, and said there should not be tax recognition of non-transparent letterbox companies and
anonymous trusts in Europe.
Further, the group said the EU should draw up a "black list"
of jurisdictions with extremely low – or zero – effective rates of taxation, those
that allow non-transparent structures, and those that have not implemented AEI.
Additionally, the party recommended that EU tax authorities should monitor
capital flows into and out of black-listed countries, and impose a tax on money remitted
back to the EU.
Finally, the SPÍ underlined the need to end harmful corporate tax competition
in Europe, to significantly lower individual income tax rates, and to increase
taxes on wealth.