THE EUROPEAN CONVERGENCE UNDER SCRUTINY

On Wednesday, November 23rd, PwC Luxembourg organized the 12th edition of the Accounting and Tax News Day. This event provided an opportunity for over 100 participants to stay informed about recent administrative practices and the latest regulatory updates. Discussions covered news regarding VAT, taxation, accounting, and their impact on the financial stability of businesses. Specialists from PwC Luxembourg also addressed the inherent risks to building security and the environment, as well as European tax harmonization projects.

The risk of building operation: What are the implications for CSR and budget forecasts?

Pierre Wauthier, a director at PwC Luxembourg, opened the morning by discussing the various risks associated with building operation in the context of the regulatory framework concerning classified establishments. Despite most office spaces over 1200 square meters having authorization, the constraints and obligations associated with these authorizations are sometimes poorly understood by operators. However, non-compliance with these obligations can result in significant compliance costs, and organizations need to increasingly anticipate these expenses.

The creation of the ACCIS: Towards tax harmonization in Europe?

Recent developments have shown that European tax harmonization projects remain at the forefront of policymakers' agendas more than ever. This initiative, which has been underway for several years, was reignited by the debt crisis in some European countries. While Germany and France have recently expressed a desire to accelerate this trend by proposing a common tax base for corporate income tax without cross-border consolidation as early as 2013, along with standardizing the tax rate, the creation of an ACCIS continues to progress. The European Commission's directive proposal published on March 16, 2011, outlining this project, is currently receiving comments from member states, with no political consensus emerging yet.

During a video debate featuring two contrasting views on tax harmonization projects, various questions were raised: the effectiveness of implementing the ACCIS compared to existing national systems, the impacts of the apportionment key on the taxation of member states, and administrative simplification. Regarding the potential neutralization of tax competition between states that the ACCIS could generate, Michel de Wolf, a professor at the Catholic University of Louvain and the University of Liège, argued that "the comparability induced by the common tax base can actually stimulate tax competition between member states."

"The harmonization system as currently proposed favors importing countries with a strong domestic market. It is therefore not surprising to see France and Germany advocating for its implementation from 2013 onwards. However, without consolidation of tax bases between different countries, a significant aspect of the system is already lost," concluded Wim Piot.