The EU says the new measures would serve as a 'powerful tool' against tax avoidance
The EU has announced proposals for 'major corporate tax reform' in the union.
The European Commission has put forward a set of proposed reforms dubbed the Common Consolidated Corporate Tax Base (CCCTB), which it says will serve as a 'powerful tool' against tax avoidance.
According to the Commission, the measures - which were first put forward in 2011 - have been redesigned to be more business friendly than before.
CCCTB would see a number of measures, such as tackling loopholes linked with 'profit-sharing for tax purposes'.
The EC says it would be mandatory for companies with global revenues of €750m or more, so they will be taxed 'where they really make their profits'.
It also include incentives for companies to invest in research & development by making the costs involved tax deductible.
In addition to CCCTB, the EU proposals would see improved processes for resolving double taxation disputes. The union says there are currently 900 such disputes, with an estimated worth of €10.5bn.
The proposals also include measures to stop companies from exploiting loopholes - or 'hybrid mismatches' - between EU member states and non-EU states' tax systems.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said: "With the rebooted CCCTB proposal, we're addressing the concerns of both businesses and citizens in one fell swoop. The many conversations I've had as Taxation Commissioner have made it crystal-clear to me that companies need simpler tax rules within the EU.
"At the same time, we need to drive forward our fight against tax avoidance, which is delivering real change. Finance Ministers should look at this ambitious and timely package with a fresh pair of eyes because it will create a robust tax system fit for the 21st century," he added.
Ireland and the UK were among the EU member states to have objected to the initial CCCTB proposals.
Earlier this year, the European Commission ruled that Apple was given a 'sweetheart' tax deal by Ireland. Apple has been ordered to pay Ireland up to €13bn in back taxes.
The Government has said it will appeal the decision.
Speaking after today's European Commission announcement, acting UKIP leader Nigel Farage said: "This year, many Irish people celebrated the centenary of their struggle for national independence and sovereignty.
"With this Commission attack on Irish tax sovereignty, it looks time for people to reassess what they gain and lose from EU membership," he added.