Issue No. 461 Report No. 331, November 16, 19,7
Issue No. 461 Report No. 331, November 16, 19,7 IN THIS ISSUE page CoIIlIIlunity: Amendment of Tax Arbitration Proposal? ••.•• ! Brussels Welcomes EC Court's Metro Decision .••••••.••• 2 France: Paris Moves to Stall Food Price Increases •••.• 3 Italy: Employers Push for 'Corporate Statute' ••••.•..• 4 Switzerland: Bern to Make Another VAT Attempt •.••.•••• 5 'Chiasso' Bank Faces High Tax, Interest Claims •••.•••• 5 Germany: More Recycling Averts Packaging Curbs •.•••••• 6 Portugal: Steep Tax Increases in Draft Budget ••••••••• 7 Euro Company Scene ... ,, ............ ,,,,,,, ... ,,,,.,,,, 8 Community: Now that both the European Parliament (EP) and the Economic •Amendment of and Social Committee (ESC) have submitted their comments on Tax Arbitration the European Commission's proposal for an arbitration pro- Proposal? cedure to eliminate double taxation, Commission tax experts are studying the reports with a view toward perhaps amend ing the measure. The objective of the draft directive is to offer a way of avoiding the double taxation of profits transferred "artificially" between associated enterprises established in different member states. It is believed that multinational companies in particular have been using this device of disguised and artificial profit transfers in numerous ways (for example, by demanding excessive patent fees). Under present circumstances, a member state's tax au thorities may slap a higher tax on a parent company that has in effect reduced its tax liability by transferring profits to a subsidiary in another state. Yet, tax author ities in the latter state may not necessarily lower their assessment accordingly. The draft proposes that in such a case a special arbitration commission, composed of national tax officials and independent persons, would work out a so lution in order to eliminate double taxation (Common Market Reports, Par.
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