The European initiatives concerning SME’s taxation

by Stefano Marchese

Chairman of FEE Direct Tax Working Party

Proposals for reforms of SMEs taxation

• October 2001: EC Communication on Company Taxation in the Internal Market

• April 2002: EC Conference in Brussels• July 2002: Creation of the Joint Forum on

Transfer Pricing• November 2003: EC Communication reviewing

progress on removal of cross border tax obstacles

• December 2003: EC Conference in Rome

European Commission Strategy

• Immediate solutions

• Longer term goal to provide SMEs with a common consolidated tax base for their EU-wide activities

What’s happening in Europe concerning SME’s taxation?

• Impact of the ECJ on national tax law

• The Lisbon objectives

Current proposals

• Home State Taxation: pilot project for SMEs

• a Common (Consolidated) Tax Base based on IFRS

Other initiatives in SMEs corporate taxation

• Amendments to the Merger Directive (2003)• Amendments to the Parent – Subsidiary

Directive (2003)• Interest and royalties Directive (2003)• Code of Conduct for business taxation (2003)• Code of conduct to eliminate double taxation in

transfer pricing cases (April 2004)