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News
EU news
Euro corporation tax
News
EU news
Euro corporation tax
A survey of the compliance costs of European Union companies published on 9 September 2004 shows that there is some merit in the European Commission's suggestion that companies should be allowed to use a single basis of assessment for corporate tax for all their European Union-wide activities so as to avoid dealing with 25 different company tax systems. The survey also reflects the potential usefulness for a one-stop shop system whereby a trader could fulfil his VAT obligations for his European Union-wide activities solely in the Member State in which he is established. The Commission's 'European Tax Survey', in which 700 European Union companies participated, was sent to more than 2,000 companies on September 2003. The main findings are that:
* a parent company with subsidiaries in other European Union Member States appears to have significantly (about five times) higher compliance costs than companies without subsidiaries;
* annual compliance costs are about €202,000 for the average small or medium-sized enterprise compared with €1,470,000 for a large company, corresponding to an estimated cost-sales ratio of 2.6 per cent for small or medium-sized enterprises compared to 0.02 per cent for large companies;
* the principal company tax compliance problems relate to transfer pricing, with an estimated 81.9 per cent of companies indicating difficulties linked to documentation requirements;
* the top VAT compliance problem is difficulties in coping with the procedures relating to the repayment and refund of VAT expenditures in other Member States, in particular for companies registered in a Member State where they do not have a permanent establishment. Some 53.5 per cent of large companies have foregone refunds due to these problems.
The survey is available on the Europa website: http://europa.eu.int/comm/taxation_customs/whatsnew.htm.
(European Commission press release dated 10 September 2004.)
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