Update

4 March 2016

FEE Tax Policy Update 22 February – 4 March

 

Highlights

 

  • Dutch Presidency publishes roadmap on BEPS and beyond – 19 February
  • European Parliament’s ECON Committee publishes anticipated draft report on CBCR – 23 February
  • OECD invites all interested jurisdictions to join global efforts to close international tax loopholes – 23 February
  • European Commission holds orientation debate on the future for VAT in the EU – 24 February

 

European Commission

 

“Ireland, Italy Join EU Cross Border VAT Rulings Pilot” – 19 February

According to Tax News, Ireland and Italy have joined the VAT Cross Border Ruling (CBR) pilot project. The project started in 2013 and is currently scheduled to run at least until 30 September 2018. The participation of Ireland and Italy will bring the total number of participating EU Member States up to 18.

Source:

http://www.tax-news.com/news/Ireland_Italy_Join_EU_Cross_Border_VAT_Rulings_Pilot____70484.html

 

The European Union and the Principality of Monaco initial new tax transparency agreement – 22 February

The EU has finalised a tax transparency agreement with Monaco, which will provide for an automatic exchange of each other’s citizens’ financial accounts information between the two jurisdictions. The collection of information is to begin on 1 January 2017, whilst the exchange of information is to start taking place from 2018 onwards. As a reminder, the EU has already signed similar agreements with Switzerland, San Marino, Liechtenstein and Andorra.

Source:

http://europa.eu/rapid/press-release_IP-16-381_en.htm

 

European Commission holds orientation debate on the future for VAT in the EU – 24 February

The College of Commissioners (meeting between all 28 Commissioners of the European Commission) has held an orientation debate on the future of VAT. During the meeting, the Commissioners discussed a number of challenges currently defining the EU VAT regime, including the VAT gap, digitalisation of economies, and obstacles in cross-border business. The Commissioners confirmed yet again the direction towards a definitive VAT regime characterised by the destination principle, and further exchanged views on taxation of intra-EU supply as well as a generalised reverse charge mechanism. The College expressed clear preference for the taxation of intra-EU supply, although this will require stronger trust and cooperation between Member States’ tax authorities.

Source:

http://europa.eu/rapid/press-release_SPEECH-16-397_en.htm

 

Expert Group publishes two reports on ways to tackle cross-border tax obstacles – 3 March

The European Commission’s tax Expert Group has published two reports concerning cross-border tax obstacles. The reports represent the Expert Group’s conclusions on measures to remove tax obstacles faced by individuals moving across borders in the EU. The reports however do not reflect the official position of the European Commission. Having said that, they are likely to feed into Commission’s work and thinking on the topics covered.

The first report titled Ways to tackle cross-border tax obstacles facing individuals within the EU focuses on the tax problems of individuals only, also excluding VAT issues, car taxation and social security contributions. Of particular interest, the report raises double taxation as the primary “substantive problem”, and highlights inadequacy in the current EU tax system with this regard. It makes a number of recommendations to address the identified challenges.

The second report titled Ways to tackle inheritance cross-border tax obstacles facing individuals within the EU for its part concentrates on cross-border tax issues related to inheritance, as its name implies. Very much like the first report, this one also highlights double or multiple taxation as a core issue. According to the report, this double or multiple taxation is caused by the variety of ways in which tax on inheritance may be imposed across Member States. In particular, the identity of the taxpayer and the nature of the assets in the estate vary according to national law. The report makes a number of recommendations to address the issue.

First report: http://bookshop.europa.eu/en/ways-to-tackle-cross-border-tax-obstacles-facing-individuals-within-the-eu-pbKP0115918/downloads/KP-01-15-918-EN-N/KP0115918ENN_002.pdf;pgid=Iq1Ekni0.1lSR0OOK4MycO9B0000A_tmuuX6;sid=kmXBz5zZ4cDBhMoB0-pfaP78lbbHHD4a7jU=?FileName=KP0115918ENN_002.pdf&SKU=KP0115918ENN_PDF&CatalogueNumber=KP-01-15-918-EN-N

Second report: http://bookshop.europa.eu/en/ways-to-tackle-inheritance-cross-border-tax-obstacles-facing-individuals-within-the-eu-pbKP0415905/downloads/KP-04-15-905-EN-N/KP0415905ENN_002.pdf?FileName=KP0415905ENN_002.pdf&SKU=KP0415905ENN_PDF&CatalogueNumber=KP-04-15-905-EN-N

 

European Parliament

 

Motion for a European Parliament resolution on rethinking the rules and regulations on tax relief for authors and publishers – 8 February

The MEP Gianluca Buonanno (ENF/ITA) has published a Motion for resolution with regard to the regulatory framework concerning tax reliefs for authors and publishers. In the draft resolution, calls for greater attention on the issue of new authors and publishers facing a number of “practical and financial problems” both in getting books into print and in covering costs and taxes. He moreover calls for legislation to establish a “more favourable environment” for the traditional book industry, new authors and small publishers.

Source:

http://www.europarl.europa.eu/sides/getDoc.do?type=MOTION&reference=B8-2016-0262&format=XML&language=EN

 

ECON Committee discusses report on Common system of value added tax – 22 February

The ECON Committee has held a first discussion on the Commission proposal with regard to the Common system of VAT. As a reminder, in December the Commission proposed to extend by two years, until December 2017, the rules establishing a 15% minimum standard VAT rate for the EU. ECON Committee has published a report on the dossier with the MEP Peter Simon (S&D/GER) as the lead rapporteur (for additional details, please see FEE Tax Policy Update published 5 February).

During the debate, the MEPs agreed with the extension of the minimum rate regime. The EPP Group (centre-Right) however criticised the Commission’s late proposal, which was published in December 2015 only although the current regime expired in January 2016. ECR Group (Eurosceptic conservatives) also agrees with the two year extension, and hopes that the Commission will use the extended time “wisely” and draft a VAT Action Plan that will make cross-border business and e-commerce easier for companies, and tackle VAT fraud.

In terms of next steps, the dossier is moving ahead in the Parliament at a fast pace, with a plenary vote currently scheduled for 9 March. It must be noted however that the European Parliament has no legislative powers in the dossier (as it concerns taxation), and may only provide its opinion on the matter.

Source:

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-%2f%2fEP%2f%2fTEXT%2bCOMPARL%2bECON-OJ-20160222-1%2b01%2bDOC%2bXML%2bV0%2f%2fEN&language=EN

 

ECON Committee publishes anticipated draft report on CBCR – 23 February

The ECON Committee has published its draft report on automatic exchange of information (AEOI) of Country by Country Reporting (CBCR) information, with the MEP Dariusz Rosati (EPP/POL) as the lead rapporteur. The report relates to the corresponding Commission proposal from 28 January to amend the Directive on Administrative Cooperation. The European Parliament has no legislative powers in this dossier, but its opinion must be submitted before the legislative proposal can be finalised (in accordance to EU case law this gives the Parliament the power of delay which depending on the dossier may or may not give it some leverage).

The draft report proposes a number of amendments to the original Commission proposal, which was largely in line with the CBCR provisions of the OECD BEPS Action 13. One major change proposed by the report relates to the exchange of information. Whilst the Commission proposal stipulates that this exchange should take place between Member States, Mr. Rosati’s draft report calls for these reports to be communicated to the Commission as well in order to enable it to monitor Member States’ compliance with state aid rules. Amendments to lower the threshold (both BEPS Action 13 and the Commission proposal only cover multinationals with a €750 million turnover) and to make the CBCR information subject to public disclosure should be anticipated.

In terms of next steps, a Committee vote is currently scheduled for 26 April. A vote in the Plenary is anticipated for 10 May. Some MEPs are concerned that the Council will be advancing on this dossier much faster than the European Parliament, and thus will not take notice of the recommendations proposed by the Parliament’s report. The Council has however confirmed that they will not conclude a political agreement without the Parliament’s opinion, and will merely agree on a general approach on 8 March.

Source:

http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&reference=PE-576.877&format=PDF&language=EN&secondRef=01

 

European Parliament approves its economic, social and single market priorities for 2016 – 25 February

The European Parliament has adopted three non-legislative resolutions highlighting the institution’s 2016 priorities in the areas of economic, social and single market affairs. Despite their non-legislative nature, the reports provide important insights into MEPs’ positions with regard to specific Single Market issues which may become relevant as relevant policy proposals are proposed by the Commission in the upcoming months. Two of the reports make reference to taxation issues. Although these provisions relating to taxation are fairly generic, but they do demonstrate that the topic maintains its consistent presence in a number of policy dossiers prepared by the European Parliament.

The first report titled European Semester for economic policy coordination: Annual Growth Survey 2016 calls overall for greater flexibility in public investments and structural reforms. Of particular interest, the report argues that tax evasion, avoidance and aggressive tax planning cause tremendous losses and erode fair competition between companies. It calls for action to tackle these issues as well as towards tax havens, for greater tax policy coordination in the EU as well as a “greater shift” away from labour taxes. Tax systems should be more transparent and tax authorities equipped with adequate resources and personnel.

The second report titled European semester for economic policy coordination: employment and social aspects in the annual growth survey 2016 focuses broadly on the social fairness dimension. Of specific interest, it also calls for action against corporate tax practices, for tax incentives to promote employment, and for shifting taxes away from labour.

The third report titled Single market governance within the European semester 2016 concentrates on Single Market integration aspects as well as SMEs in particular. It however makes no specific reference to taxation issues.

Source:

http://www.europarl.europa.eu/news/en/news-room/20160223IPR15486/Parliament-approves-its-economic-social-and-single-market-priorities-for-2016

 

TAXE II hearing with the Dutch Presidency – 29 February

The Dutch State Secretary responsible for Taxation Eric Wiebes has attended a hearing of the TAXE II Committee as the representative of the Presidency. During the hearing, MEPs discussed with the Minister a number of heated topics in the direct tax area, and in particular expressed consistent criticism at the lack of transparency and working methods of the Council’s Code of Conduct Group, added further pressure on the Presidency to endorse and push for public Country by Country Reporting (CBCR), criticised the tax practices and system of the Netherlands, and challenged the Minister in particular on the Dutch patent box regime. On CBCR, the Minister stated that the Netherlands will be in favour of public disclosure if the ongoing impact assessment shows no harmful effects on businesses (Commission proposal expected for 12 April). He however stated that it is unlikely that a Council agreement on a possible public disclosure proposal can be finalised by the end of the current Presidency. On the proposal to split the Anti-Tax Avoidance Package (ATAP) into those elements that are in line with OECD BEPS recommendations and those that go beyond, the Minister confirmed that the Presidency will try first to advance the dossier as a single bloc but that ultimately “something is better than nothing”. Finally, during the same hearing it was announced that the TAXE II Committee would draft a report (as opposed to a resolution) to conclude its work, with the MEPs Jeppe Kofod (S&D/DEN) and Michael Theurer (ALDE/GER) as lead rapporteurs. The Committee has requested for a two-month extension of its mandate, and is expected to vote on its draft report on 20 June whilst a Plenary vote is anticipated for July.

Source:

http://www.europarl.europa.eu/news/en/news-room/20160229IPR16402/Dutch-Council-Presidency-anti-tax-avoidance-package-to-be-ready-before-summer

 

MEP Questions & Answers

 

Solar energy and VAT in the UK – 15 February

The European Commission has replied to a question asked by three British Green MEPs with regard to solar energy and VAT. In their question, the MEPs refer to a Court of Justice of the EU’s (CJEU) ruling which has led the UK HMRC to conclude that it must remove the reduced 5% VAT rate on residential solar panel installations and bring the rate up to 20%. The MEPs argue that this will hinder UK’s renewable energy goals, and therefore ask the Commission whether the CJEU ruling in fact provides for adequate flexibility allowing for a reduced rate on solar energy infrastructures, and whether it will consider amending the VAT Directive so as to allow for reduced VAT rates on renewables and energy efficient products. In his reply, Commissioner Moscovici confirms the interpretation of the CJEU decision by the HMRC, and states that there are other means beyond reduced VAT rates to support energy saving materials, including direct subsidies. The Commissioner moreover confirms that the upcoming VAT Action Plan will include an analysis on VAT rates.

Question: http://www.europarl.europa.eu/sides/getDoc.do?type=WQ&reference=P-2016-000237&format=XML&language=EN

Answer: http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=P-2016-000237&language=EN

 

Council

 

BEPS: Presidency roadmap on future work – 19 February

The Dutch Presidency has published its BEPS roadmap which provides insights into the priorities and timelines of the Presidency in advancing EU dossiers related to BEPS specifically and other taxation issues more broadly. The roadmap reveals an admirable level of ambition, but the actual amount of possible progress especially with regard certain elements of the Anti-Tax Avoidance Package (ATAP) remains to be seen.

In the short term, the Presidency will notably seek progress on the Interest and Royalties Directive (IRD) and in particular on a minimum effective taxation (MET) clause within the dossier. The Presidency will thus seek a political agreement on this, and will additionally consider the inclusion of the OECD modified nexus approach in the IRD.

With regard to the Anti-Tax Avoidance Directive (ATAD), the Presidency will aim for a political agreement by June. In light of the last ECOFIN discussion however, this seems unlikely as a number of Member States have reservations with the non-OECD BEPS provisions in the ATAD.

With regard to amending the Directive on Automatic Exchange of Information (AEOI) to incorporate BEPS provisions on Country by Country Reporting (CBCR), progress is expected to be much faster and an agreement on a general approach on 8 March. On reforming the Code of Conduct Group, the Presidency will be aiming for the Group’s reform and in particular renewing its mandate. The first step will be to discuss the governance, transparency, working methods and public visibility and transparency of the Group. The second step will consist of discussing the mandate around the concept that profits should be subject to taxation in the EU. On both areas the Presidency will seek progress and put forward proposals before June.

With regard to hybrid mismatches, the Presidency will seek by June an agreement regarding guidance and explanatory notes on Hybrid Permanent Establishment (PE) Mismatches in situations involving third countries. Further progress is sought in the short term on a number of other dossiers as well, including patent boxes and tax good governance in third countries.

In the medium term, the Code of Conduct Group will start work on transfer pricing in the context of the relevant OECD BEPS Actions (8-10), on outbound payments and on the disclosure of aggressive tax planning (BEPS Action 12). On these dossiers the progress will further continue during subsequent Council Presidencies, depending on their respective priorities.

Source:

http://data.consilium.europa.eu/doc/document/ST-6039-2016-INIT/en/pdf

 

Dutch Presidency pushing for progress in revising the mandate of the Code of Conduct group – 26 February

According to Agence Europe (article only available to subscribers), Member States are expected to make a decision by June regarding an extension of the mandate of the Code of Conduct Group on business taxation. The Member States feel in particular that the Group’s organisation and methods of working require improvements, and that a subgroup to deal with relations towards third countries should be established. This subgroup could notably work on areas related to the Commission’s communication on an external strategy for effective taxation published on 28 January as part of the Anti-Tax Avoidance Package (ATAP). Of additional interest, the Code of Conduct Group should according to Member States look into possible initiatives to better inform the public of its work, and to present a report on this to the ECOFIN (Council of Finance Ministers) by June 2017.

Source:

Agence Europe 02/03

 

Council Conclusions on “The Single Market Strategy for services and goods” – 29 February

Member States have adopted conclusions on the Single Market Strategy proposed by the European Commission in autumn. Of particular interest, the conclusions include provisions regarding VAT, and notably call for a significant reduction in compliance costs stemming from VAT requirements. Member States consequently look forward to Commission plans regarding VAT simplification for SMEs active in e-commerce, as well as a more comprehensive simplification package for SMEs. This demonstrates the well-known appetite of Member States to simplify and streamline EU VAT rules with the view of removing obstacles to businesses and tackling fraud.

Source:

http://www.consilium.europa.eu/en/meetings/compet/2016/02/st06622_en16_pdf/

 

Country-by-country reporting – Presidency hopes to protect commercial information – 2 March

According to Agence Europe (article only available to subscribers), the Dutch Presidency has emphasised that the exchange of information between tax administrations of Country by Country Reporting (CBCR) data as proposed by the European Commission on 28 January must not lead to disclosure of confidential commercial information. The Presidency’s suggestion for amendment relates to the so-called secondary mechanism system as described in the BEPS Action 13. The mechanism allows for another company within a group to fulfil the group’s CBCR obligations in case the ultimate parent has no reporting obligation within specified circumstances. Member States are currently discussing the exact obligatory nature of secondary reporting. According to sources, France has been calling for a right of sanctioning by Member States, whilst Germany has emphasised the need for greater flexibility. The Presidency is aiming for an agreement on a general approach on 8 March.

Source:

Agence Europe 02/03

 

Court of Justice of the EU

 

ECJ provides ruling on Hungarian vouchers entailing tax advantages – 23 February

The Grand Chamber of the Court of Justice of the EU (CJEU) has issued a ruling on a Hungarian accommodation, leisure and meal voucher scheme. The Court argues that the scheme is at least partially in violation of EU tax provisions as it provides to its users unfair tax advantages not available to other similar voucher schemes.

Source:

http://curia.europa.eu/juris/document/document.jsf?text=&docid=174524&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=303633

 

International

 

“Australia Changes Tax Rules For Foreign Investment” – 22 February

According to Tax News, Australia will introduce changes to requirements on foreign investment applications as part of the government’s efforts to make multinationals pay taxes on their earned profits. The new conditions cover for example disclosure of information on the investments and on new transactions with non-residents to whom Australian tax law provisions on transfer pricing and anti-avoidance may apply. Moreover, additional conditions may be established on a case by case basis if a “significant tax risk” has been identified. The article includes additional details on the applicable new conditions.

Source:

http://www.tax-news.com/news/Australia_Changes_Tax_Rules_For_Foreign_Investment____70499.html

 

“Digital tax developments in the Asia-Pacific region” – 23 February

Taxamo has published its latest digital tax update for the Asia-Pacific region which reveals a number of major changes in the region’s digital tax landscape. For example Japan has introduced changes to its consumption tax legislation, whereby now all foreign companies that supply digital services to Japanese consumers must collect and remit an 8% consumption tax to the Japanese authorities. New Zealand for its part will amend its Goods and Services Tax (GST) laws in October so that sales of digital services by foreign suppliers above a threshold of approximately €35.000 for a 12-month period will be subject to a GST rate of 15%. In addition, a number of other countries and jurisdictions in the region are undertaking or planning digital tax reforms, including Australia, Philippines and Singapore.

Source:

https://www.taxamo.com/digital-tax-developments-asia-pacific/?utm_source=Taxamo+Blog+Subscription&utm_campaign=d43bfa9667-BLOG_POST_24&utm_medium=email&utm_term=0_cf2402efdc-d43bfa9667-305315961&mc_cid=d43bfa9667&mc_eid=26a24dfe06

 

“Indian Budget To Remove Tax Complexity, Certain Tax Breaks” – 23 February

According to Tax News, India is seeking to simplify its tax legislation, and to provide greater consistency and legal certainty for businesses. The country’s Revenue Secretary Hasmukh Adhia has argued that the number of different taxes applicable at different administrative levels places unnecessary compliance burdens on businesses and discourages investment.

Source:

http://www.tax-news.com/news/Indian_Budget_To_Remove_Tax_Complexity_Certain_Tax_Breaks____70505.html

 

“Google tax deal: MPs criticise secretive settlement” – 24 February

According to the Guardian, the tax dispute settlement reached earlier between Google and the UK has come under further criticism by the House of Commons’ Public Accounts Committee. The Committee argues that the agreed amount of £130 million is “disproportionately small” in comparison to Google’s business activities in the UK, and especially in comparison to the rumoured €1.6 billion that France is planning to retrieve from the company (see Reuters article below). The Committee moreover states that the arrangement between UK and Google cannot be assessed appropriately due to the secret nature of the negotiations.

Source:

http://www.theguardian.com/technology/2016/feb/24/google-tax-deal-mps-criticise-secretive-settlement

 

“Italy Runs EUR34bn Tax Dispute Court Cases” – 24 February

According to Tax News, Italy has a total of €34 billion of tax income due in pending cases of the country’s tax court. According to statistics cited by the article, 30% of all cases raised by Italian taxpayers against the tax authorities related to local taxes, and 70% to disputes on individual income tax, VAT and regional taxes on production.

Source:

http://www.tax-news.com/news/Italy_Runs_EUR34bn_Tax_Dispute_Court_Cases____70523.html

 

Germany plans a reform of its investment tax system – 24 February

The Federal Cabinet of Germany has agreed on a reform plan of the country’s investment tax legislation. The purpose of the reforms is to stimulate venture capital and strengthen the financing of innovative start-ups. The venture capital market in Germany remains relatively small in comparison to countries such as the US and the UK.

Source:

http://www.bmwi.de/DE/Presse/pressemitteilungen,did=753206.html

 

“France seeks 1.6 billion euros in back taxes from Google” – 24 February

According to Reuters, France is aiming to collect €1,6 billion in back taxes from Google. Reuters bases its information on a source within the French Ministry of Finance. Google has been criticised in France (as well as several other countries) for its aggressive tax planning practices, whilst Google itself maintains that it respects the tax provisions in all the jurisdictions where it operates.

Source:

http://www.reuters.com/article/us-google-france-taxation-idUSKCN0VX1Z5

 

“No ‘Sweetheart’ Tax Rulings Granted By EFTA States” – 25 February

According to Tax News, the Surveillance Authority of the European Free Trade Association (EFTA) has not found any evidence of state aid infringements in the tax rulings of Iceland, Liechtenstein and Norway, all three EFTA members. The Surveillance Authority argues that the tax ruling practices of these three countries are not in violation of the state aid provisions of the European Economic Area (EEA) Agreement. EFTA argues that its state aid rules are broadly in line with those applied within the EU.

Source:

http://www.tax-news.com/news/No_Sweetheart_Tax_Rulings_Granted_By_EFTA_States____70539.html

 

“Australia Planning Further Corporate Tax Avoidance Action” – 26 February

According to Tax News, the Australian Tax Office (ATO) has announced a number of actions it is planning to undertake in order to tackle international tax avoidance by multinationals. ATO will focus in particular on implementing Australia’s Multinational Anti Avoidance Legislation (MAAL) proposed in September 2015 as well as the BEPS recommendations, and to address issues around e-commerce arrangements, thin-capitalisation manipulation, related party-financing as well as offshore hubs.

Source:

http://www.tax-news.com/news/Australia_Planning_Further_Corporate_Tax_Avoidance_Action____70547.html

 

HMRC Policy paper: Country by country reporting – 26 February

The UK HMRC has published an updated policy paper regarding Country by Country Reporting (CBCR). The policy paper provides further information on the scope and details of the requirement, and concerns multinationals with a “UK presence”. They are largely in line with the BEPS Action 13 provisions. It is worth remembering in this context however that the UK Chancellor of the Exchequer George Osborne has expressed his support for public disclosure. The European Commission is expected to put forward a proposal with this regard on 12 April.

Source:

https://www.gov.uk/government/publications/country-by-country-reporting-updated/country-by-country-reporting-updated

 

“India To Introduce Patent Box Regime, CbC Reporting” – 29 February

According to Tax News, the Minister of Finance of India, Mr. Arun Jaitley, has presented the country’s budget for 2016, including provisions concerning Country by Country Reporting (CBCR) for large multinational groups. In accordance to the BEPS Action 13, the proposed provisions would only concern companies with a consolidated annual revenue above €750 million. The reporting requirement would notably fall on all such entities that are resident in India, or that are constituent entities in India but belonging to an international group with an overseas parent. The CBCR template is in line with the one proposed in BEPS Action 13, and the scheme would enter into effect on 1 April 2017. No provisions on public disclosure are envisaged. Of additional interest, the budget proposal includes the introduction of a patent box regime.

Source:

http://www.tax-news.com/news/India_To_Introduce_Patent_Box_Regime_CbC_Reporting____70569.html

 

“Luxembourg Announces Corporate Tax Cut” – 2 March

According to Tax News, Luxembourg is planning cuts in corporate tax rates and amendments to the current personal income tax regime. With regard to corporate taxes, the government is planning a 3% decrease down to 18% by 2018, with a lower 15% rate applicable to “young innovative companies” with an annual taxable income of a maximum of €25,000. With regard to personal income taxes, the government will get rid of the temporal 0,5% “crisis tax” and reduce tax rates in the lowest income brackets, whilst increased tax brackets will be introduced for upper ends of the income scale. Moreover, withholding tax on interest will be doubled to 20%.

Source:

http://www.tax-news.com/news/Luxembourg_Announces_Corporate_Tax_Cut____70597.html

 

“Singapore Legislates For Automatic Tax Info Exchange” – 2 March

According to Tax News, Singapore is planning to commit itself to automatic exchange of tax information with other jurisdictions, as part of the OECD’s Common Reporting Standard (CRS). The new law would notably establish a requirement on all financial institutions to gather CSR information on all non-Singaporean tax residents.

Source:

http://www.tax-news.com/news/Singapore_Legislates_For_Automatic_Tax_Info_Exchange____70593.html

 

OECD

 

All interested countries and jurisdictions to be invited to join global efforts led by the OECD and G20 to close international tax loopholes – 23 February

The OECD has agreed on the establishment of a framework enabling “all interested countries and jurisdictions” to participate in reforming the international tax system. This constitutes effectively a broadening of the BEPS Project, and the proposal will subsequently be presented to G20 Ministers of Finance. According to the proposal, all interested jurisdictions would be granted the status of a BEPS Associate, and will work “on an equal footing” with OECD and G20 members on the remaining standard-setting work in the BEPS Project context, as well as monitoring the implementation of the BEPS recommendations. In practice this opens doors for a number of developing countries to contribute to the shaping of the global tax framework. According to some critics however their role will be limited as major decisions on the direction to which global tax policy reform should be steered have already been taken by the more developed countries.

Source:

http://www.oecd.org/tax/all-interested-countries-and-jurisdictions-to-be-invited-to-join-global-efforts-led-by-the-oecd-and-g20-to-close-international-tax-loopholes.htm

 

OECD releases discussion draft on the treaty residence of pension funds – 29 February

The OECD has launched a public consultation on proposals regarding treaty residence of pension funds. The consultation in particular seeks views on change proposals to the OECD Model Tax Convention in order to ensure that pension funds are appropriately considered to be residents in the country in which it has been constituted for tax treaty purposes. The changes are sparked in particular by the BEPS Action 6 regarding the Granting of Treaty Benefits in Inappropriate Circumstances. The deadline for providing comments is 1 April.

Source:

http://www.oecd.org/tax/treaties/discussion-draft-treaty-residence-pension-funds.htm

 

“Countries Adopting BEPS Proposals, OECD Tells G-20” – 1 March

According to Tax News, the OECD has published a report for the attention of G20 Ministers of Finance which demonstrates that a number of countries are already implementing BEPS recommendations. In particular, countries are well progressed in the implementation of BEPS Action 12 on hybrid mismatches and Action 13 concerning notably Country by Country Reporting. The report moreover shows that countries are updating their transfer pricing provisions with the view of transposing BEPS Actions 8 to 10.

Source:

http://www.tax-news.com/news/Countries_Adopting_BEPS_Proposals_OECD_Tells_G20____70578.html

 

State Aid

 

Commissioner Vestager hits back at US criticism of the Commission’s state aid investigations – 29 February

Commissioner Vestager has sent a letter to the US Secretary of the Treasury Jacob Lew in which she responds to criticism that the European Commission is selectively, unfairly and retroactively targeting US companies in its state aid investigations. In her letter, Commissioner Vestager argues that it is the European Commission’s role to ensure that the conditions of competition in the Single Market are fair, and that the provision of more advantageous tax treatment to certain companies can constitute a distortion to competition. She moreover emphasises that transaction prices between companies within the same group must follow the arm’s length principle.

Source:

http://g8fip1kplyr33r3krz5b97d1.wpengine.netdna-cdn.com/wp-content/uploads/2016/02/SKM_C454e16022917101.pdf

 

Commission approves agreement between Greece and TAP allowing new gas pipeline to enter Europe – 3 March

The European Commission has given its approval for an agreement between Greek authorities and the Trans-Adriatic Pipeline (TAP), ruling that the agreement respects EU state aid provisions. In the Commission’s assessment, the project in question will improve EU’s energy security and diversity of supply without posing harmful effects on competition within the Single Market. The agreement notably grands TAP a special tax regime for a period of 25 years, and the Commission’s investigation attempted to uncover whether this could constitute a threat to fair competition. The tax regime in question leads to TAP paying less taxes regardless of whether tax rates increase or decrease.

Source:

http://europa.eu/rapid/press-release_IP-16-541_en.htm

 

Other News

 

“Advisers supportive of new Digital Disclosure Service” – 19 February

According to AccountancyAge, the UK HMRC is launching in April a new online tool to facilitate automatic capture of tax disclosures. The online tool will be available to customers from all tax regimes and behaviour types, and constitutes an integral part of HMRC’s transition towards a more digitalised administration.

Source:

http://www.accountancyage.com/aa/news/2447760/advisers-supportive-of-new-digital-disclosure-service?utm_medium=email&utm_campaign=AA.Tax.Cat.14DU.A.M0800&utm_source=AA.DCM.Scheduled_Updates

 

New report on Land Value Tax – 22 February

The London Assembly Planning Committee (LAPC) has published a report on the feasibility of a Land Value Tax (LVT) for London. Of particular interest, the report includes a global map of countries where a LVT is already in place, in a form or another (p. 14). The report notably concludes that a LTV could be crucial in ensuring that currently “underutilised” sites in the city (e.g. car parks or plots with long-demolished buildings) are used to meet housing needs. With this regard, it for example calls for pilot projects to assess the exact form and usefulness of such a scheme.

Source:

http://www.taxjustice.net/2016/02/25/which-countries-have-a-land-value-tax/

 

“In search of a new balance: the impact of Belgian tax treaties on developing countries” – 25 February

The NGO Eurodad has published a report on the potential impacts of Belgium’s tax treaties on developing countries. The report concludes that the ways in which Belgium has concluded its treaties have had visible negative impacts on the ability of developing countries to collect income which could have otherwise been used for example for sustainable development goals. The treaties are in most instances asymmetrical, and in such cases give Belgium and Belgian investors potentially unfair advantages over the partner country.

Source:

http://eurodad.org/Entries/view/1546541

 

“EU Tax Ruling May Prompt Business Move Out of Belgium” – 28 February

According to the Wall Street Journal (WSJ), a number of multinationals are considering moving part of their business activities out of Belgium following a ruling by the European Commission earlier in January. As a reminder, back in January the Commission ordered Belgian authorities to re-collect €700 million in taxes from 35 companies as it interpreted the country’s so-called excess profit scheme to be against EU state aid provisions. WSJ bases its assessment notably on an interview with the CEO of Atlas Copco, Ronnie Leten, according to whom the company’s costs of operating in Belgium will increase by 4-5% and due to which the company is considering relocation out of Belgium as one of the options. ABInBev has expressed similar sentiments. Belgium has appealed against the Commission ruling, but will nevertheless have to collect the indicated tax income.

Source:

http://www.wsj.com/articles/eu-tax-ruling-may-prompt-business-move-out-of-belgium-1456666493

 

“Who bears the tax burden? End corporations’ tax dodging” – 2 March

The civil society organisation Eurodad has launched a petition calling on the European Commission to establish public Country by Country Reporting (CBCR). This new petition is yet another sign that public CBCR is a heated and politicised topic, and further demonstrates the amount of pressure applied by the civil society on the Commission to take action.

Source:

http://eurodad.org/Entries/view/1546550

 

“Tax Paid By FTSE100 Firms Falls” – 2 March

According to Tax News, the average effective UK tax rate of FTSE 100 companies has decreased to 22,6% during 2014-2015. The figure is based on data provided by the accountancy group UHY Hacker Young, which attributes the fall to lower corporate tax rates as well as tax planning by companies.

Source:

http://www.tax-news.com/news/Tax_Paid_By_FTSE100_Firms_Falls_____70598.html

 

“EY Notes Surge In Indirect Tax Burdens, Reforms” – 2 March

According to Tax News, EY has published its latest indirect tax report for 2016. The report notably shows that a growing number of countries are implementing indirect tax systems to address decreasing revenues caused by developments in the digital sector. Moreover, indirect taxes continued to increase on a global level, and over 160 countries have established VAT or GST regimes. Puerto Rico will introduce a new VAT system in April 2016 – the first US jurisdiction to do so.

Source:

http://www.tax-news.com/news/EY_Notes_Surge_In_Indirect_Tax_Burdens_Reforms____70595.html

EY indirect tax report 2016:

http://www.ey.com/Publication/vwLUAssets/ey-indirect-tax-developments-in-2016/$FILE/ey-indirect-tax-developments-in-2016.pdf

 

ECA report – Tackling intra-Community VAT fraud: More action needed – 3 March

The European Court of Auditors (ECA) has published a report titled Tackling intra-Community VAT fraud: More action needed. The report notably argues that the current EU regime for tackling VAT fraud is not as effective as it should and notably suffers from a lack of comparable data and indicators. For the purpose of the report, delegations of the ECA visited five Member States and saw indications of a lack of effective cross-checks between customs and tax data, limitations in the quality of data shared between Member States’ tax authorities, and lack of cooperation and coordination between relevant authorities. The report consequently puts forward a number of recommendations to the Commission, calling it notably to put forward amendments to enable effective cross-checks between customs and tax data, to focus on monitoring Member States’ performance (timing, quality of data etc.) in their exchange of information, to establish a common system of collecting intra-community statistics on VAT fraud, and to encourage Member States to better coordinate their reverse charge policies.

Source:

http://www.eca.europa.eu/Lists/ECADocuments/INSR15_24/INSR_VAT_FRAUD_EN.pdf

 

Events

 

9-11/03/2016, Global Tax Policy Conference, Irish Tax Institute and Ash Center (Harvard Kennedy School), Dublin.

22/03/2016 12:30-14:00, Europe at a crossroads: how to build an efficient economic governance of the Eurozone?, Bruegel, Brussels.

12/04/2016 12:30-14:00, Taxation Policy with Stephen Quest, Director-General, DG TAXUD, BritCham, Brussels.

18/04/2016, Reforming regulation of professions: results of mutual evaluation and way forward, European Commission, Brussels.

09/2016, Bruegel Annual Meetings, Bruegel, Brussels.

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