Taxation: Finance ministers agree to strengthen the code of conduct used to identify and curb harmful tax measures of member states

F.P. Report

BRUSSELS: The EU continues to promote fair tax competition and address harmful tax practices, both within the EU and worldwide. EU finance ministers today agreed on a revised code of conduct for business taxation: a political, intergovernmental commitment by member states to apply reinforced screening rules when looking for and remedy tax measures that could be harmful to the tax bases of other member states. The ultimate goal is to tackle harmful tax competition, tax evasion and tax avoidance in the EU.

While the international dimension of the work of the code of conduct group is more widely known – the group is cooperating with third country jurisdictions to promote and strengthen tax good governance and carries out the work leading to the regular revision of the EU list of non-cooperative tax jurisdictions – the primary task of the code of conduct group has been to detect and eliminate harmful tax measures in EU member states since 1997.

Today’s revision of the code, the first one since 1997, means that member states will broaden the scope of the tax measures under scrutiny when examining harmful tax practices within the EU. The update of the code took the form of a resolution of the Council and of the representatives of the governments of the member states, meeting within the Council, on a revised code of conduct for business taxation.

“We confirmed today our commitment to a fairer tax environment in the EU by reinforcing the rules we apply when tackling harmful tax practices in an evolving economy. Our experts in taxation constantly look out for harmful tax practices. Since starting its work in 1997, the code of conduct group succeeded in eliminating around 140 harmful tax practices within the EU. The code of conduct of business taxation has not been amended since 1997 and today´s agreement further improves its effectiveness also in the light of the recent international tax reform.”

Zbyněk Stanjura, Minister of Finance of Czechia

The revised code of conduct introduces in particular the concept of ‘tax features of general application’. Whereas previously only preferential measures (such as special regimes or exemptions from the general taxation system) were examined, under the new rules the scope will also include tax features of general application. These will be regarded as harmful if they lead to double non-taxation or the double/multiple use of tax benefits.

The revised code of conduct further clarifies the review process in the code of conduct group, which is responsible for the administration of the code.

This revision will allow the Council code of conduct working group to continue its work to address harmful tax practices efficiently.


The code of conduct is a political commitment that has an intergovernmental nature. The Council’s code of conduct group consists of high-level taxation experts of the member states. It is responsible for monitoring possibly harmful tax measures in the EU member states.

The code of conduct forms the basis of the work of the Council code of conduct working group. Its elected Chair is supported by the General Secretariat of the Council.

Its work also has an international dimension which aims to promote effective changes in respect of worldwide tax good governance through cooperation. The code of conduct group also carries out the technical work, screening and assessment leading to the regular revision by the Council of the EU list of non-cooperative jurisdictions for tax purposes. This EU list is regularly revised following an in-depth review of the implementation of commitments taken by all third-country jurisdictions that are part of the process.