On 10 September 2024, ETAF participated in the European Commission's evaluation of the Anti-Tax Avoidance Directive (ATAD). We welcome this evaluation as a concrete action in the framework of the ongoing European Commission’s effort to rationalise EU reporting requirements.
ETAF views the ATAD as an important tool laying down minimum standard measures on addressing the most common forms of aggressive tax planning and tax avoidance practices that directly affect the functioning of the internal market. However, our members found that the ATAD provisions have been implemented inconsistently across Member States, with some opting for excessive measures leading to further fragmentation, unnecessary bureaucracy and double taxation.
Additionally, the introduction of the Minimum Tax Directive has created some duplication with the ATAD Directive resulting in additional burden for taxpayers. In particular, the relation between the Minimum Tax Directive and the Controlled Foreign Company rule in the ATAD1 needs clarification as both aim to prevent tax avoidance by transferring income to low-tax jurisdictions, and overlap in their scope of application.
Therefore, ETAF’s feedback focuses on the identified implementation challenges and the coherence with other EU Directives.
On 29 July 2024, ETAF participated in the European Commission's evaluation of the Directive on administrative cooperation in tax matters (DAC) and its successive amendments (from DAC2 to DAC6).
ETAF welcomes very much this evaluation as a first concrete action in the framework of the ongoing European Commission’s effort to rationalise EU reporting requirements.
In principle, ETAF views the DAC as an effective tool for enhancing cooperation among tax authorities ithe European Union and combating tax evasion. While we acknowledge that DAC Directives have significantly increased information exchange, we must also recognize that they have resulted in a substantial volume of data that tax administrations must now manage. It is questionable whether all the information requested by the successive DACs are really in use and of use for the tax authorities. Furthermore, more and more reporting obligations were shifted onto taxpayers.
Our members found that the main current problematic reporting requirement for the tax profession originates from the Directive (EU) 2018/822 regarding mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (DAC6). The co-existence of the country-by-country disclosure requirements foreseen in Directive (EU) 2016/881 (DAC4) and other EU Directives is also creating some double reporting issues.
Therefore, after some preliminary comments on the evaluation itself, our feedback focuses on DAC6 and DAC4 requirements.
On 24 January 2024, ETAF replied to the European Commission's public consultation on the proposal Business in Europe: Framework for Income Taxation (BEFIT), published on 12 September 2023.
On 20 December 2023, ETAF replied to the European Commission's public consultation on the proposal for a Directive transposing the OECD Transfer Pricing Guidelines into the EU legal order, published on 12 September 2023.
On 20 December 2023, ETAF replied to the European Commission's public consultation on the proposal for a directive establishing a Head Office Tax (HOT) system for micro, small and medium sized enterprises.
We recognized the potential of the HOT initiative, especially for SMEs that may be planning to expand across the borders and may have been held back by the perspective of high compliance costs. However, as it stands, we expressed some concerns about how the proposed HOT initiative would work in practice and the unintended effects it could generate.
On 27 November 2023, ETAF replied to the European Commission's public consultation on how to rationalise reporting requirements originating from EU legislation and weighing on companies.
Our statement outlines that DAC6 reporting requirements are seen as the main problematic ones for the tax profession at the moment. However, we also shed light on other reporting requirements in recently adopted/implemented EU legislations or in pending tax proposals which might reveal problematic.
In general, ETAF sees the introduction of white lists, threshold values, categories, or gradual implementation to reduce the reporting burden for SMEs compared to MNEs, as good tools to rationalise reporting requirements.
On 12 October 2023, ETAF replied to the European Commission's public consultation on its upcoming recommendation on the recognition of qualifications of third country nationals.
As preliminary remarks, ETAF would like to acknowledge the potential of this initiative to address labour and skills shortages in general, even if, in the tax area, there is only limited room for improvement because of the differences in tax laws, which constitute a de facto barrier to professional mobility.
Our statement is outlining some specificities of the regulated tax profession to be taken into account in the context of the discussion on the recognition of qualifications of third country nationals. In particular, our comments relate to the scope of the initiative, the proposed alignment with Directive 2005/36/EC and the recognition of skills acquired in different contexts.
On 18 September 2023, ETAF replied to the European Commission's public consultation on a Proposal for a Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER).
On 4 April 2023, ETAF replied to the European Commission's public consultation on the VAT in the digital age package (ViDA).
In particular, ETAF provided the European Commission with its comments and recommendations on:
On 30 March 2023, ETAF replied to the European Commission's public consultation on the proposal for an eighth amendment to the Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC8).
While we welcome the main purpose of this proposal, which is to extend the mandatory automatic exchange of information between EU Member States to income earned through crypto assets, our main concern relates to the proposed minimum penalties, which we found unlawful and disproportionate.
