Council and Parliament reach a deal on the AML Directive and Regulation
On Tuesday 16 and Wednesday 17 January 2024, the Council of the EU and the European Parliament found an agreement on the remaining parts of the Anti-Money Laundering package, i.e. the AML Directive and the AML Regulation. With the new package, all rules applying to the private sector will be transferred to a new regulation, while the directive will deal with the organisation of institutional AML/CFT systems at national level in the Member States. The deal on the new AML Directive reintroduces access to beneficial ownerships registers for individuals and groups that can demonstrate a legitimate interest. Those will now be clearly listed. The deal on the AML Regulation notably expands the scope of customer due diligence measures to traders of luxury goods, real estate agents with high-value assets, crowdfunding platforms, and crypto asset service providers. It also clarifies rules about the legal privilege in the context of money laundering. The agreements now need to be formally adopted by the European Parliament and the Council before it can come into force. The last step in finalising the AML package is determining the seat and budget allocated to the future European Anti-Money Laundering Authority (AMLA).
Results of the first ECOFIN under the Belgian Presidency on 16 January 2024
On Tuesday 16 January 2024, the Economic and Financial Affairs Council met in Brussels for the first ECOFIN under the Belgian EU Presidency. This was the occasion for the Presidency to present its work programme for the first semester of the year. When it comes to the tax files, the Belgian Presidency is committed to implementing the OECD’s Pillar 1 by 1 January 2025. Moreover, the finalisation of the ViDA proposal will be the key priority during their presidency, the Belgian Minister of Finance Vincent Van Peteghem said during the meeting. The Belgian presidency will also continue the work on the Commission’s plan to reduce the administrative burden by 25%, by streamlining and coordinating the reporting standards within different pieces of legislation. The Council also approved conclusions on the alert mechanism report 2024 and the annual sustainable growth survey 2024, as well as the 2024 recommendation on the economic policy of the euro area. Moreover, ministers took note of the state of play of the economic and financial impact of Russia’s aggression against Ukraine and discussed the EU’s financial support to Ukraine and the ongoing work on the use of frozen and immobilised assets.
Belgian Prime Minister presents Belgian Presidency's programme in EP Plenary
On Tuesday 16 January 2024, the Belgian Presidency of the Council of the EU presented in the European Parliament Plenary session its work programme for the first half of the year. Belgium, for its thirteenth time, assumes the rotating Presidency at a pivotal moment for the European Union, facing significant crossroads. Confronted with the consequences of Russia's illegal aggression in Ukraine, the energy crisis, misinformation, extreme weather events, a new conflict in the Middle East, the forthcoming European elections, but also that of the American Congress, the Belgian Presidency will strive to better protect European citizens, strengthen our cooperation, and prepare our common future Belgian Prime Minister Alexander De Croo said. To this end, its programme will pay particular attention to maintaining the EU’s support for Ukraine. Belgian Prime Minister Alexander De Croo reminded MEPs in that one of the greatest challenges ahead will be to maintain a strong and dynamic European economy. As the current institutional cycle draws to a close, the Presidency will support a smooth transition to the next cycle. It will support the adoption of the 2024-2029 strategic agenda and prepare for discussions on the future of the European Union.
European Parliament adopts its opinion on the DEBRA directive
On Tuesday 16 January, at its Plenary session, the European Parliament adopted its report on the proposal laying down rules on a debt-equity bias reduction allowance and on limiting the deductibility of interest for corporate income tax purposes (DEBRA). The report on the proposal was adopted, as amended, with 324 votes in favour, 132 votes against, and 155 abstentions. The proposal was presented in May 2022 but the Council of the EU decided to pause the negotiations on this file until the details of the BEFIT proposal will be known. By this vote, the European Parliament sent a signal of support for the DEBRA proposal and urged the Council to resume the negotiations.
Non-paper of 15 Member States on a new horizontal Single Market Strategy
On Monday 15 January, Croatia, the Czech Republic, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia and Sweden published a joint discussion paper on the future of the Single Market, calling for reduced reporting burdens on companies. The document notably calls for a thorough, timely, and high-quality impact assessment of each legislative proposal, including consideration of the cumulative impacts and costs of different initiatives and existing rules on the competitiveness of EU businesses, especially for SMEs. The proposed strategy is structured around 7 main priorities: - a Single Market for Services and the rise of the service economy; - Professional mobility and tackling skills gap; - Free movement of products, green transition and standardization; - Enforcement and implementation of EU law; - Better regulation; - Digital Transformation deepening the Single Market; and - Monitoring the developments of the Single Market.
EPPO investigates 19 € million cross-border VAT fraud
The European Public Prosecutor’s Office (EPPO) announced on Thursday 18 January that it carried out 25 searches and other investigative measures in six countries, in an action targeting a suspected €19 million VAT fraud, involving second-hand mobile phones imported from Hong Kong, the United Arab Emirates (UAE) and the United States. The investigation, led by the EPPO in Munich, stretches across Bulgaria, Germany, Italy, Malta, the Netherlands and Slovenia. At issue is a suspected criminal scheme whereby companies, based in several EU Member States, fraudulently apply reduced VAT to the sale of second-hand mobile phones imported from the United States and other non-EU countries, in order to illicitly increase their profits. Ordinarily, when selling second-hand goods bought from private persons in the EU, or from sellers who have already paid VAT in full for such items, the reseller may apply the so-called ‘margin taxation’ scheme, under the conditions set out in the applicable law. In such cases, the reseller only has to pay VAT on the profit margin they make (the difference between the price paid for the item and the price for which it is sold), and not on the full sale price of the item. However, it is suspected that the companies under investigation applied this provision unlawfully, charging reduced VAT when the full rate was due. The suspected fraud also allowed mobile phones to be sold at a lower market price, thus causing unfair competition.
Zambia joins the OECD Global Forum on Transparency
Zambia became the 171st member of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the OECD announced on Wednesday 17 January. Zambia is the sixth African country to join the Global Forum in the past eighteen months, following the Republic of the Congo (June 2022), Angola (March 2023), Zimbabwe (April 2023), Sierra Leone (May 2023) and the Democratic Republic of the Congo (December 2023). Like all other members, Zambia will participate on an equal footing and is committed to combatting offshore tax evasion through the implementation of the internationally agreed standards of exchange of information on request (EOIR) and automatic exchange of financial account information (AEOI). Members of the Global Forum include all G20 countries, all OECD members, all international financial centres, and a majority of developing countries.
