Commission proposes to grant Czechia the right to apply temporary generalised reverse charge mechanism
The European Commission has proposed to grant Czechia the permission to apply a generalised reverse charge mechanism (GRCM), as a derogation from the VAT Directive.
The Commission assesses that Czechia fulfils the criteria for applying a GRCM that were established in a relevant amendment to the VAT Directive. This amendment was approved by the Council on 20 December 2018.
The other EU member states will now have to approve Czechia’s request by unanimity.
As a reminder, Czechia blocked for two years EU’s progress on another proposal, on reduced VAT rates for e-publications, because other EU member states led by France were not in favour of the proposed GRCM Read more
Commission responds to European Parliament’s tax reform calls
The European Commission has sent a formal response to the recommendations of the European Parliament’s TAX3 Committee.
TAX3’s recommendations are legally non-binding, but the Commission’s point-by-point response to them gives interesting indications to its future plans on tax.
The Commission’s reply is fairly generic overall, but a few interesting elements stand out, such as:
- The Commission hints that it is reviewing its public tendering rules to see whether they are robust enough against potential ‘conflicts of interest’
- The results of the Commission’s evaluation of the Directive on Administrative Cooperation (DAC) would be ready in autumn 2019, on the basis of which possible follow-up would be considered
- The Commission will work on identifying and addressing remaining cross-border tax obstacles within the Single Market
Either way, it will be up to the next Commission – starting in November this year – to decide the direction of its tax work.
Commission publishes latest taxation trends report: environmental tax revenues remain stable
The European Commission has published its latest Taxation trends report. The report provides a set of interesting key statistics and developments from the EU’s tax system, such as:
- Environmental and energy taxes remained stable in the EU over last decade, with revenue from them representing 2,4% of GDP
- In 2017 EU tax revenues were 39% of GDP – an almost 2% increase from 2009
- Statutory and effective corporate tax rates have decreased since 2005 but revenues are in slow increase since 2009
- Labour taxes increased slightly 2012-2017
EU’s new tax dispute resolution system enters into force
On 1 July, the EU’s new tax dispute resolution system came into force. The new mechanism aims to ensure quicker and more effective resolution of tax disputes between Member States.
The mechanism notably introduces a mutual agreement procedure (MAP) initiated by a taxpayer, under which Member States must aim to resolve the dispute amicably within two years.
The Directive was adopted by the Council in July 2017. Read more