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Economic and Financial Affairs Council: Main results

EU News 184/2016

Council of the European Union

Corporate tax avoidance 
The Council discussed a draft directive addressing tax avoidance practices commonly used by large companies. After lengthy discussions, it agreed to postpone an agreement on the dossier to its meeting on 17 June 2016.

The draft directive builds on 2015 OECD recommendations to address tax base erosion and profit shifting. It addresses situations where corporate groups take advantage of disparities between national tax systems in order to reduce their tax liability.

VAT action plan
The Council adopted conclusions on the Commission's VAT action plan and a special report by the Court of Auditors on VAT fraud.

The conclusions highlight the importance of administrative cooperation, in particular the automatic exchange of information, for preventing VAT fraud. The Council welcomed plans to reduce VAT compliance burdens for businesses, particularly for SMEs, and emphasised the need to simplify cross-border e-commerce. The conclusions welcome the Commission's intention to propose increased flexibility on VAT rates, whilst noting the need for the VAT system to maintain a sufficient level of harmonisation.

The Commission will present a proposal at the latest in 2017 for a definitive VAT system for cross-border trade.


The Council also adopted a directive maintaining the minimum standard VAT rate at 15% until the end of 2017, pending discussions on definitive VAT rules.

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