ETAF standpoint on the future Single Market strategy 2025
On Thursday 30 January, ETAF replied to the European Commission's call for evidence on its future Single Market strategy, to be released in June 2025. ETAF fully supports the strengthening of the Single Market, at a time where the EU competitiveness is challenged. Its members believe that any reform of the Internal Market must respect the subsidiarity principle and the country of destination principle, while focusing on SMEs, unlocking the full potential of digitalization and simplifying the EU tax system. For the tax advisory profession, a careful balance must be struck to ensure that measures to strengthen the Internal Market do not compromise the essential regulatory standards which are the fundament for the profession’s independence, quality and integrity. In this context, professional regulation should not be seen as an unjustified barrier to the Single Market but rather as a vital safeguard. Professional regulation ensures that tax advisers are well-qualified and trained to deliver accurate advice, benefiting both taxpayers and tax authorities. Just as the EU upholds high safety and quality standards for goods, it should also value high standards in services provision within the Single Market. We therefore ask EU legislators to ensure that the Single Market initiatives respect and complement the high ethical and professional standards in place, particularly in Member States with well-established regulatory frameworks. ETAF stands ready to work together with the European Commission in addressing these challenges and to offer further insights into the functioning of professional regulation within its member organizations.
European Commission unveils its Competitiveness Compass for the next five years
The European Commission published on Wednesday 29 January a Competitiveness Compass, that will guide its work in the coming five years and lists priority actions to boost EU competitiveness. The 27-page document is largely based on the reports by Mario Draghi and Enrico Letta and does not go much further than what the President of the Commission already announced in recent speeches. It is based on three Pillars: - closing the innovation gap; - a joint roadmap for decarbonisation and competitiveness; and - reducing dependencies and increasing security. The Commission also defined five “horizontal enablers”: simplification, lowering barriers to the Single Market, financing competitiveness, promoting skills and quality jobs, and better coordination of policies at EU and national level. Key initiatives announced include an Omnibus proposal that will simplify sustainability reporting, due diligence and the EU taxonomy – the first of a series of Simplification Omnibus packages – and a new definition of small mid-caps, both scheduled for 26 February. In addition to the already announced Single Market Strategy, the European Commission also plans to propose, end of 2025 – beginning of 2026, a 28th legal regime for companies to simplify applicable rules and reduce the cost of failure, including any relevant aspects of corporate law, insolvency, labour and tax law. The communication only announces these initiatives and their timeline but does not give more details. The Commission also said it will deliver an “unprecedented simplification effort” and that, in order to further increase its ambition, the 25% and 35% burden reduction targets should in the future refer to the costs of all administrative burdens, and not only reporting requirements.
María José Garde re-elected as chair of the Council’s Code of Conduct Group
The Council’s Code of Conduct Group on Business Taxation decided on Wednesday 29 January to re-elect María José Garde as its chair, for a second term of two years starting on 5 February 2025. María José Garde has chaired this Council preparatory body that oversees the implementation of the EU’s Code of Conduct on Business Taxation group since 2023. María José Garde is Director General of Taxation at the Ministry of Finance in Spain. She has extensive work experience in international taxation. She has also served as chair of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes.
European Commission calls on Member States to fully transpose the Directive on the VAT scheme for SMEs and the Directive on VAT rates
The European Commission decided on Friday 31 January to open infringement procedures by sending letters of formal notice to 8 Member States (Bulgaria, Ireland, Greece, Spain, Cyprus, Lithuania, Portugal and Romania) for failing to transpose the Directive 2020/285 on the special VAT scheme for SMEs. Member States had to transpose this Directive into national law by 31 December 2024. The Directive on the special VAT scheme allows small enterprises to sell goods and services without charging VAT and alleviates their VAT compliance obligations. Moreover, small enterprises established in another Member State than where VAT is due may exempt their supplies from VAT in the same way as domestically established small enterprises can in their respective Member State. On the same day, the European Commission also opened infringement procedures by sending a letter of formal notice to 7 Member States (Belgium, Bulgaria, Greece, Spain, Lithuania, Portugal and Romania) for failing to communicate the full transposition of the Directive 2022/542 on rates of VAT. Member States had to communicate on the full transposition of this Directive into national law by 31 December 2024. The Directive on rates of VAT allows for a wider use by Member States of reduced rates, including the use of zero rates for essential products such as food, pharmaceuticals and products intended for medical use. The Member States concerned now have two months to respond and to complete their transposition and notify their measures to the Commission. In the absence of a satisfactory response, the Commission may decide to proceed with the second step of the infringement procedure and issue a reasoned opinion.
Eurojust busts big money laundering scheme
An international investigation spanning several years has led to the arrest of 23 criminals running a sophisticated money laundering scheme, Eurojust announced on Monday 27 January. The group acted as a financial service for other criminals to launder their profits. The scheme facilitated the laundering of approximately EUR 100 million. An international coalition of Spanish, Cypriot and German authorities, with support of the French authorities and Eurojust and Europol, was established to dismantle the group. The takedown resulted in the seizure of over EUR 8 million in cash and the freezing of EUR 27 million in cryptocurrencies. Investigations into the group and its financial service continue.
