Code of Conduct Group publishes assessments of additional tax regimes and proposes changes to tax haven list
The Council’s Code of Conduct Group has published further assessments of several jurisdictions’ tax regimes.
These include Vietnam (here and here), Mongolia, Cabo Verde, Belize (here, here and here), Poland (here and here) and Malta.
The Code of Conduct Group also published its proposals to amend the EU’s list of non-cooperative jurisdictions. More specifically, it proposes to remove Jordan from sections 1.2 and 3.1 of the so-called grey list. The Group feels that since Jordan has joined the Global Forum on Transparency and Exchange of Information for Tax Purposes and the Inclusive Framework on BEPS, it has fulfilled the tax good governance requirements set out by the EU.
The EU blacklist now contains eight jurisdictions: American Samoa, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, the US Virgin Islands and Vanuatu.
EU finance ministers take position on sustainable taxation
At the 5 December ECOFIN, EU finance ministers adopted Conclusions on environmental taxation. These conclusions send a strong political signal to the European Commission to follow-up with relevant legislative proposals.
In the Conclusions, the finance ministers call for a revision of the EU’s Energy Tax Directive (ETD) but in a way that it improves the functioning of the EU internal market, supports transition to a climate-neutral EU, and contributes to the long-term competitiveness of the EU and its member states fiscal needs.
They also call on the Commission to give particular consideration to minimum rates, and specific tax reductions and exemptions.
As a reminder, currently a revision of the ETD is expected in early-2020 to address tax exemptions to kerosene specifically, and later 2020 with a broader set of changes. Read more
EU finance ministers shed light on way forward on VAT and e-commerce
The finance ministers also adopted Conclusions on VAT and e-commerce. The Conclusions make reference to a wide range of detailed VAT reforms that the member states want to see materialised, including measures to improve administrative cooperation between member states’ tax authorities in the fight against VAT fraud and to make use of technology for this purpose. Read more
EU finance ministers call for addressing tax obstacles to capital market integration
Furthermore, the finance ministers adopted Conclusions on improving capital market integration in Europe and, specifically, the next steps for the Commission’s Capital Markets Union (CMU) project.
Of interest from a tax perspective, the member states call on the Commission and each other to study the prospect of further cooperation and “targeted harmonisation” on withholding taxes, in order to foster cross-border investment. Read more
EU finance ministers take step towards coordinated defensive measures against non-cooperative jurisdictions
The Council also adopted Conclusions and endorsed a six-monthly report on the progress achieved by the Code of Conduct Group on business taxation.
The report includes in particular a detailed state of play on the EU list of non-cooperative jurisdictions for tax purposes.
It also includes guidance on further coordination of national defensive measures in the tax area towards non-cooperative jurisdictions. The guidance invites all member states to apply a legislative defensive measure in taxation vis-à-vis the listed jurisdictions as of 1 January 2021, aiming to encourage those jurisdictions’ compliance with the Code of Conduct screening criteria on fair taxation and transparency.
See also here for a handy overview of overall work progress by the Code of Conduct Group during the Finnish Presidency.
EU finance ministers fail to progress on public CBCR
And finally, at the request of Sweden the finance ministers also discussed public country by country reporting (CBCR). The discussion was a repetition of the earlier discussions in the competitiveness Council (see feature story), with same country positions expressed.
As a next step, the Council will continue in the future discussions on the public CBCR legal base but no further breakthroughs should be expected for the time being. However, reportedly the Council’s legal service expressed its readiness to help adapt the proposal’s recitals in an effort to change the text’s emphasis from tax to company law.