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European Commission proposes head office tax system for SMEs

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The European Commission has presented a series of initiatives to address the needs of Europe's SMEs in the current economic environment. This includes a Directive establishing a ‘head office tax system’ for SMEs, which is intended to will give SMEs operating cross-border through permanent establishments the option to interact with only one tax administration – that of the head office – instead of having to comply with multiple tax systems.

According to the Commission: ‘This proposal will increase tax certainty and fairness, reduce compliance costs and distortions in the market that influence business decisions, while minimising the risk of double and over taxation and tax disputes. The expected decrease in compliance costs should, in particular, foster investment and cross-border expansion in the EU. SMEs operating in different member states will be able to fully maximise the freedom of establishment and the free movement of capital without being hindered by unnecessary tax related obstacles.’

Issue: 1632
Categories: News
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