The status of the OECD negotiations on the international tax reform will be discussed by the ECOFIN on 16 March and the recent progress reached at the end of February at OECD/G20 level shall play a relevant part in the discussion among EU Finance Ministers. The virtual meeting of 26 February, under the Italian Presidency of the G20, has reiterated a strong support of all the G20 Ministers for an agreement on both Pillars of the reform proposed by the OECD Inclusive Framework. Positive signals came in particular from the United States: Janet Yellen (US Treasury Secretary) confirmed the intention of the Biden administration to drop the call for a “safe harbour” (which had blocked the discussions in 2020) and she remarked that the US are committed to multilateral discussions on both pillars to reach a global solution.
On 3 March, the ambassadors of the Member States to the EU (Coreper) have approved the negotiating mandate of the Council of the EU on the European Commission’s proposal for public Country-by-Country Reporting (CbCR). After a five-year deadlock, on 25 February qualified majority was reached to approve the text at the Competitiveness Council, though Ireland, the Czech Republic, Hungary, Sweden, Luxembourg and Malta remained of the opinion that the text should have been unanimously approved by the ECOFIN. On 4 March, the ECON and JURI Committees of the European Parliament have also approved the opening of the interinstitutional negotiations: Evelyn Regner (S&D, Austria) and Ibán García Del Blanco (S&D, Spain) will be the main negotiators for the Parliament.
On 3 March, the European Commission issued a proposal for renewing the docks due regime in the French outermost regions of Guadeloupe, French Guiana, Martinique and Reunion for the period 2022-2027. This scheme allows for exemptions or reductions in dock dues for a limited list of locally produced products. The dock due is an indirect tax adopted on the basis of Article 349 TFEU to compensate outermost regions for competitive disadvantages. The current proposal was due to expire in June 2021 and this new one extends its for six months, until 31 December 2021, to give France time to transpose into its national law this new regime. The European Parliament will be consulted for its opinion on this proposal and the French MEP Stéphane Bijoux (Renew Europe) has already welcomed the Commission’s proposal.
On 3 March, the Coreper (ambassadors of the Member States to the EU) authorized the European Commission to open negotiations with China on establishing a basis for a possible future VAT Administrative Cooperation framework. The Commission plans a two-step approach: first a Memorandum of Understanding (i.e. a non-binding instrument under EU law) and, later on, if possible, an international agreement. The Commission will regularly update the Member States on the progress in these negotiations.
On 4 March, the Court of Justice of the European Union (CJEU) has set aside the judgment of the General Court of the European Union (GCEU) which had annulled a Commission’s decision classifying as State aid the tax scheme of four Spanish professional football clubs. A 1990 Spanish law obliged all Spanish professional sports clubs to turn into public limited sports companies, with the exception of professional sports clubs that had achieved a profit during the financial years preceding 1990. Fútbol Club Barcelona, and three other professional football clubs (Club Atlético Osasuna, Athletic Bilbao and Real Madrid) came within that exception and chose to continue operating in the form of non-profit legal persons enjoying, in that capacity, a special rate of income tax. That specific tax rate remained, until 2016, below the rate applicable to public limited sports companies. By decision on 4 July 2016, the Commission took the view that that legislation, constituted unlawful and incompatible State aid by introducing a preferential corporate tax rate for the four clubs concerned. Barcelona brought an action against the decision before the GCEU which annulled the decision on 26 February 2019 on the ground that the Commission had not proved the existence of an economic advantage conferred on the beneficiaries of the measure at issue. In its judgement of 4 March 2021, the CJEU set aside the GCEU judgement on the basis that the General Court “erred in law when it found that the decision at issue was to be construed as a decision relating both to an aid scheme and to individual aid, since the Commission also expressed its view, in its decision, on the aid individually granted to the four clubs named as beneficiaries”.
