Germany publishes new compromise text on FTT
On 9 December, Germany proposed a new financial transaction tax (FTT) compromise, in an attempt to unlock the stalling negotiations.
The text remains close to the French model, with a 0,2% tax rate and limited to buying or selling of shares of listed companies with a market capitalisation of over EUR 1 billion.
Newer elements include excluding IPOs and leaving it to each country to decide whether to tax private pension products – a key demand of Belgium.
The German proposal was criticised from the left for not going far enough whilst the right fears that the FTT would hamper investment.
The ten EU countries negotiating on FTT have yet to agree on how the tax yields would be divided between them. Read more
Member states adopt proposal to exempt EU defence efforts from VAT
On 16 December, EU member states adopted the Commission’s proposal to grant VAT exemptions for EU defence cooperation under the Common Security and Defence Policy (CSDP).
The text as agreed by EU member states introduces no significant changes to the Commission proposal. The text only makes clarifications and specifies that the exemptions should not cover civilian missions under the CSDP.
Finnish Presidency amends public CBCR Directive to address legal base concerns
Before ending its term in December 2019, the Finnish Presidency of the Council proposed changes to the public country by country reporting (CBCR) proposal in an attempt to address concerns on the text’s legal basis. In practice, this means removing as many references to the provision’s tax impacts.
The changes include, notably, removing references to the potential of CBCR data in transfer pricing risk assessments, and additional wording to emphasise that the measure aims to increase corporate transparency towards investors, creditors and the general public.
Croatia, which started its six-month Council Presidency in January 2020, has shown no intentions to advance the file during its term. Read more
Croatian Presidency publishes its priorities, including on tax
Croatia began its six-month rotating Council Presidency in January 2020, and published its work priorities.
For tax, there are very few concrete commitments. The Presidency will work towards a “modern tax system” that is “based on transparent, efficient and sustainable taxation procedures” and legal certainty.
It will also “continue discussions on priorities and further steps to be taken in the area of direct and indirect taxation”.
According to a provisional timetable, Croatia plans a debate between EU finance ministers on VAT definitive regime and VAT rates reform at the 17 March ECOFIN. A progress report or policy debate on CCCTB is planned for the 19 May ECOFIN. Read more