Commission recommends EU member states to not grant COVID state aid to companies with tax haven links
On 14 July, the European Commission issued a legally non-binding recommendation, suggesting member states to bar from COVID state aid companies with links to third countries that feature on the EU’s tax blacklist.
The recommendation includes a couple of exceptions: when the company’s tax liability in the member state granting the support is deemed adequate, or if the company makes a “legally binding” activities to cease its links to the third country. Read more
European Commission 15 July tax package: DAC 7
On 15 July, the European Commission published its anticipated package on fair and simple taxation. The package contains a mix of legislative proposals and non-legislative roadmaps for future tax measures, and consists of three overarching elements:
- DAC 7 proposal
- Communication on tax good governance in the EU and beyond
- Action Plan on fair and simple taxation
The proposed DAC 7 revision (and annex with definitions) extends EU tax info exchange rules to digital platforms. It aims to:
- Ensure that MS automatically exchange information on the revenues generated by sellers on online platforms
Clarify the rules in other areas in which Member States work together to fight tax abuse, e.g. with explicit inclusion of joint tax audits and group requests.
European Commission 15 July tax package: tax good governance Communication
The Communication on tax good governance promotes fair tax and fighting “unfair tax competition” in the EU and internationally. Some elements of interest include, for example:
- The Code’s scope should be widened to cover more types of regimes, general aspects of the national corporate tax systems and relevant taxes other than corporate tax, including Golden Visas
- Require EU countries to implement strict economic substance and transparency standards
- By end-2020 EC will review scope of the non-cooperative jurisdictions scoreboard to include additional countries into the screening process
In 2022 if EU MS’ defensive measures against listed non-cooperative jurisdictions are not sufficiently coordinated, EC will issue a proposal on coordinated defensive measures.
European Commission 15 July tax package: Action Plan on fair and simple taxation
The Action Plan presents 25 actions (listed in an annex) to make tax simpler, fairer and better adjusted to the modern economy that EC will take between 2020-2024.
The actions aim to remove obstacles ranging from registration to reporting, payment, verification and dispute resolution. The actions also aim to help Member States to harness the potential of data and new technologies to better fight tax fraud, improve compliance and reduce administrative burdens.
See here to find out more about what the Action Plan, and the other two elements of the tax package, entail.
Commission to table digital tax proposal in first semester of 2021
Benjamin Angel, Director for direct taxation at DG TAXUD, has confirmed that the Commission will table a proposal for a digital tax by “end of first semester 2021”. It will aim to introduce the digital tax at latest from 1 January 2023 as a new own resource of the EU. Read more
Commission prolongs VAT and customs duties relief for medical equipment imports
On 23 July, the European Commission decided to prolong the temporary relief for customs duties and VAT on the import of medical devices and protective equipment from third countries in order to help in the fight against coronavirus.
This measure covers masks and protective equipment, as well as testing kits, ventilators and other medical equipment. It will prolong the initial period of six months by another three months. Read more
Gerassimos Thomas to become new Director-General of DG TAXUD
Gerassimos Thomas, the former Greek Deputy Minister of Environment & Energy, has been appointed as the new Director-General of DG TAXUD. He takes over from Stephen Quest, who moved to become the Director-General of the Commission’s Joint Research Centre earlier in spring.
Prior to his post in the Greek government, Mr. Thomas worked within the European Commission as Director at DG ECFIN (2009-2014) and Deputy Director-General at DG ENER (2014-2019).
With background in energy and environment, Mr. Thomas is a reflection of the Commission’s tax agenda’s green focus. Read more
Commission launches two public consultations on green taxation
On 22 July, the Commission launched two anticipated public consultations on taxation and the Green Deal.
The consultations concern:
The ETD revision aims to overhaul the taxation of energy products (electricity, natural gas, coal etc.) to better reflect the EU’s climate ambitions. This includes revising minimum rates for fuels, re-thinking current tax exemptions, and reducing implicit subsidies for fossil fuels and certain economic sectors.
With the CBT, the Commission seeks to set up a WTO-compliant tool to reduce the risk of carbon leakage and deter companies from shifting production out of the EU to countries with less stringent green regulations.
Commission proposes to amend VAT rules to accommodate trade with Northern Ireland after the transition period
On 7 August, the Commission proposed changes to the EU’s VAT rules, in preparation for the end of the transition period with the UK.
The amendment to the VAT Directive introduces a special identification number for businesses in Northern Ireland, so that EU VAT provisions can be properly applied to goods in line with the Protocol on Ireland / Northern Ireland. Under the Protocol, goods sold and transported from Northern Ireland to the EU (and vice-versa) will be treated the same as cross-border supplies of goods within the EU, including for VAT exemptions and deductions. Supplies of services in Northern Ireland will be subject to UK VAT rules after the transition period. Read more
Commission publishes first implementation report of ATAD
On 19 August, the Commission published a report evaluating the implementation of the EU’s anti-tax avoidance Directive (ATAD). It provides an overview of the implementation of the early applicable ATAD measures (interest limitation, GAAR, CFC) across Member States.
The report shows that several EU Member States have still not implemented some of ATAD’s provisions. The Commission has launched infringement procedures against these countries.
Another more comprehensive ATAD evaluation is to be published at latest in January 2022. Read more