Update

Tax Policy

 Cannot read this email? Open in your browser.June - July 2020 
 

Tax Policy Update

29 June – 10 July

 
 
 
 

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Get the latest news on SME, tax, technology, audit and sustainable finance.

 
 
 
 
 

European tax professionals call for better tax governance

 
 
 

Read the joint statement of Accountancy Europe and CFE Tax Advisers Europe

 
 
 
 

Highlights

 
 
 
 
  • OECD agreement in 2020 looking less likely as negotiations on hold for US elections
  • Composition of European Parliament’s tax Committee (FISC) clarified
  • OECD releases global tax reporting framework for digital platforms in the sharing and gig economy
 
 
 
 
 

Message to readers

 
 
 
 

Tax Policy Updates going on summer holidays, back in September!

Dear readers,

Despite me greatly enjoying preparing these Tax Policy Updates just for you, I am sad to announce that they will be going on a much-deserved summer break.

But fear not! From September onward the Updates will be back in your inboxes, and the next edition will also cover any key tax developments that may occur in the summer months.

In the meanwhile, if you have any news, announcements or gossip related to taxation, please don’t hesitate to get in touch through johan@accountancyeurope.eu

See you in the autumn!

With kindest regards,

Johan

 
 
 
 
 

EU Developments

 
 
 
 

European Commission


Commission requests Belgium to correctly transpose ATAD

In its July infringements package, the European Commission announced that it has sent a letter of formal notice to Belgium requesting it to correctly transpose the Anti-Tax Avoidance Directive Council Directive (ATAD).

The Commission is pointing at the following flaws:

  • Belgium’s definition of public infrastructure projects that can be exempt from ATAD’s interest limitation rules does not correspond to ATAD’s definition
  • Belgium excludes from the interest limitation rules entities which do not qualify as “financial undertakings” in ATAD
  • Belgian law does not eliminate double taxation from CFC rules and does not allow a taxpayer to deduct tax paid by a controlled foreign company in the state of tax residence

If Belgium does not act within the next three months, the Commission may send a reasoned opinion to the Belgian authorities. Read more

Commission publishes latest taxation trends in the EU report

European Commission has published latest tax trends data for Europe. The data shows that in 2018, tax revenues as percentage of GDP increased slightly in the EU 27 up to 40.2%. Revenues remained almost equally distributed among indirect taxes, direct taxes and social contributions. The distribution of revenues by tax base (consumption, labour and capital) remained stable compared with previous years (around 52% from labour, 28% from consumption and 20% from capital). Read more

 

 
 
 
 
 

European Parliament


Members of tax Committee (FISC) confirmed

The upcoming permanent tax Committee of the European Parliament will be called FISC Committee, and the following MEPs will join as full members:

  • 8 Members of the EPP group: Herbert Dorfmann (Italy), Markus Ferber (Germany), José Manuel Garcia-Margallo y Marfil (Spain), Eniko Gyori (Hungary), Christophe Hansen (Luxembourg), Othmar Karas (Germany), Ludek Niedermayer (Czech Republic) and Lidia Pereira (Portugal)
  • 6 Members of the S&D group: Paul Tang (Netherlands), Marek Belka (Poland), Pedro Marques (Portugal), Jonás Fernández (Spain), Aurore Lalucq (France) and Irene Tinagli (Italy)
  • 4 Members of the Renew Europe group: Gilles Boyer (France), Martin Hlaváček (the Czech Republic), Billy Kelleher (Ireland) and Dragoș Pîslaru (Romania)
  • 3 Members of the ECR group: Roberts Zīle (Latvia), Patryk Jaki (Poland) and Eugen Jurzyca (Slovakia)
  • 3 Members of the Greens: Sven Giegold (Germany), Kira Marie Peter-Hansen (Denmark) and Ernest Urtasun (Spain)
  • 3 Members of the ID group: Francesca Donato (Italy), Helene Laporte (France) and Antonio Maria Rinaldi (Italy)
  • 2 Members of the GUE/NGL group: Manon Aubry (France) and Martin Schirdewan (Germany)
  • 1 NI: Clara Ponsati Obiols (Spain)

FISC Committee will consist of 30 MEPs and will be Chaired by MEP Paul Tang (S&D/Netherlands).

European Parliament adopts position on VAT e-commerce COVID deferrals

On 8 July, the European Parliament Plenary adopted its non-binding position on the Commission’s proposed deferrals to the VAT e-commerce provisions in light of COVID.

The Parliament position passed with 494 votes in favour, 165 against and 35 abstentions. With the Parliament opinion now adopted, the provisions can become EU law as member states already gave their green light earlier. Read more

European Parliament’s socialist group launches tax justice roadmap

The S&D Group in the European Parliament has launched a new tax justice campaign with a dedicated website and a roadmap with recommendations.

Among the recommendations is a call for stronger regulation of the role of auditors, accountants and tax advisers to ensure “they would not be facilitating certain harmful tax practices and dodgy arrangements; and instead become tax compliant facilitators”.

 
 
 
 
 

Council


Germany publishes its Council Presidency programme

Germany has published the programme of its Council Presidency, which began at the beginning of July and will run until the end of 2020.

On taxation, the document singles out the following priorities:

  • To implement the results of OECD’s digital and minimum tax negotiations into EU law. ECOFIN is expected to adopt Conclusions on this at its 1 December meeting
  • To finalise the financial transaction tax (FTT), which is tentatively planned for the agenda of 1 December ECOFIN
  • Revise the Directive on administrative cooperation in tax (DAC), on which a Commission proposal is expected for 15 July

Read more

 
 
 
 
 

MEP Questions & Replies


Commission gives further details on its 15 July tax package

  • Question by MEP Marek Belka (S&D/Poland)
  • Reply by Commissioner Gentiloni
 
 
 
 
 

CJEU


EU General Court to issue ruling on Apple tax state aid case on 15 July

The EU General Court will deliver its judgment over Apple and Ireland’s appeal of a EUR 13 billion European Commission tax bill for the company on Wednesday July 15.

Back in August 2016, the Commission decided that Ireland had granted unlawful tax benefits to Apple, and ordered the company to pay the amount into an escrow account, pending the appeal.

The judgment of the General Court will most likely be appealed further up to the Court of Justice of the EU (CJEU). Read more

 
 
 
 
 

International Developments

 
 
 
 

The OECD highlights progress made in fight against tax evasion

According to the OECD, the international community continues making progress in the fight against offshore tax evasion, with implementation of transparency standards by the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Nearly 100 countries carried out automatic exchange of information in 2019, enabling their tax authorities to obtain data on 84 million financial accounts held offshore by their residents, covering total assets of EUR 10 trillion.

This represents a significant increase over 2018 – the first year of such information exchange – where information on 47 million financial accounts was exchanged, representing EUR 5 trillion. The growth stems from an increase in the number of jurisdictions receiving information as well as a wider scope of information exchanged. Read more

OECD says US still committed to global digital tax talks, but deal in 2020 looks bleak

OECD’s secretary-general Agel Gurria has insisted that the US has not pulled out of the OECD tax reform negotiations. However, OECD’s tax director Pascal Saint-Amans, speaking to the Belgian parliament, admitted that an agreement in 2020 looks more difficult and for sure would not happen before the US November elections. Read more

OECD releases global tax reporting framework for digital platforms in the sharing and gig economy

The OECD has released a new global tax reporting framework, the Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy (MRDP).

Under the MRDP, digital platforms are required to collect information on the income realised by those offering accommodation, transport and personal services through platforms and to report the information to tax authorities. Read more

OECD sees misalignment between location of reported profits and economic activities

The OECD has published new data that provides aggregated information on the global tax and economic activities of nearly 4,000 MNEs headquartered in 26 jurisdictions and operating across more than 100 jurisdictions worldwide.

The data is released in the OECD’s annual Corporate Tax Statistics publication, and is a major output based on the Country-by-Country Reporting (CBCR) requirements for MNEs.

On the basis of the CBCR data, the OECD for example concludes in its report that there “could be a misalignment between the location where profits are reported and the location where economic activities occur”. Read more

 
 
 
 
 

In brief

 
 
International
 
OECD Platform for Collaboration on Tax invites public comments on the draft Toolkit on Tax Treaty Negotiations
 
International
 
OECD publishes report on tax transparency in Africa
 
International
 
OECD launches a report highlighting importance of managing reputational risk for successful tax administration
 
International
 
Building tax systems in developing countries is vital to overcoming COVID-19 and achieving the SDGs
 

This curated content was brought to you by Johan Barros, Accountancy Europe policy manager since 2015. You can send him tips by email, follow him on Twitter and connect with him on LinkedIn.

 
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