The Director General of the Directorate-General for Taxation and Customs Union (TAXUD) of the European Commission has appointed the European Tax Adviser Federation (ETAF) as a member of its Platform for Tax Good Governance.
Welcoming the news, ETAF President Philippe Arraou commented: “ETAF has already been a member of the Platform from 2016 to 2019 and is absolutely delighted to contribute again to this important forum. In addition to our tax expertise, we do believe that our federation’s strong focus on professional law and the regulation of tax advisers will provide valuable and different insights to the Platform’s work. We fully rely on the local and international experience and knowledge of Mr Mitterlehner, Mr Magyar and Mr Rech to represent ETAF members position”.
Our main representative, Andreas Mitterlehner, is an Austrian tax adviser and an active and committed member of our Austrian member’s (KSW) Professional Expert Committee for Tax and Social Law. Currently Managing Partner of ICON Wirtschaftstreuhand GmbH, he has accumulated 10 years of experience in tax, including in corporate and group tax law, international tax planning, cross-border taxation and tax compliance. His outstanding technical expertise and professional experience are highly valued by the Austrian profession and ETAF.
Csaba Magyar, our first alternate, has more than 10 years of expertise in the field of tax planning and international taxation, both as a qualified international tax expert and member of our Hungarian member (MOKLASZ) as well as in the Hungarian Tax Authority. Currently Managing Partner at Crystal Worldwide Magyar Law Firm, he deals with tax conventions and complex investment structures on a daily basis. As Head of the International Tax Control Unit in the Hungarian Tax Authority, he was previously in charge of several multilateral tax controls involving numerous EU countries and their tax authorities.
Christian Rech, our second alternate,is currently a partner of the tax consultancy Rech Wagner GmbH in Germany and a certified accountant under the law of Luxembourg. Mr Rech is a member of the board of our German member (DStV) and a member of DStV’s expert group on Justice and Professional law. He is also a member of the Board of the German Tax Adviser Federation and a member of the Board of the association of tax advisers in Rheinland Pfalz.
The Platform for Tax Good Governance brings together non-government and government stakeholders to exchange views on issues concerning tax transparency, exchange of information for tax purposes, fair and efficient taxation, cross-border taxation, fight against aggressive tax planning, double taxation and double non-taxation. It has the important task to advise the European Commission on the priorities for action as well as the appropriate means and instruments to achieve progress in these areas. The mandate of the Platform will run until June 2029. Its first meeting took place on Friday 13 September 2024.
On Wednesday 17 April 2024, EU officials, experts and tax advisers discussed how to make the EU tax system simpler, rationalised and future-proof at a conference organised by the European Tax Adviser Federation (ETAF) in Brussels. The full-room event also gathered 1 800 people online.
In his introductory speech, ETAF President, Philippe Arraou gave some preliminary food for thought to panellists by presenting the ETAF manifesto, which sets out 25 recommendations to the European Commission and the European Parliament for the next five years.
During the first panel, moderated by Elodie Lamer, journalist for Tax Notes, speakers had a forward-looking discussion about what the future tax policies under the next European Commission should look like.
Benjamin Angel, Director of Direct Taxation, Tax Coordination, Economic Analysis and Evaluation at the DG TAXUD of the European Commission reminded the audience that the main priority is to adopt the eight texts currently on the table. He asserted that the discussion will restart still under the Belgian Presidency of the Council of the EU on the proposal for a Directive to fight the misuse of shell entities (UNSHELL). While not expected before the end of the current mandate, the Securing the Activity Framework for Enablers (SAFE) is unlikely to completely disappear from the agenda of the next European Commission, he said. In his view, possible other “trendy” topics could also grow in importance, such as the taxation of cross-border teleworkers.
No new tax proposal is expected under the remaining mandate, as the proposal for a ninth amendment to the Directive on administrative cooperation (DAC) in tax matters, to accompany the implementation of Pillar Two and avoid multiple reporting for companies in scope, has been paused since the work on administrative guidance is still ongoing at the OECD, Mr Angel said. He, however, announced that an honest evaluation of the efficiency of the successive amendments to the DAC (from DAC1 to DAC6) will be launched in May.
For MEP Isabel Benjumea Benjumea (EPP, Spain), the shift to the right of the European Parliament predicted in the polls after the 2024 European elections will result to a lesser push towards greater harmonisation of taxation. “I believe that the language of coordination, exchange of information, simplification and competitiveness will be the keywords in any tax negotiation in the next mandate”, she said.
Panayiotis Nicolaides, Director of Research at the EU Tax Observatory, pointed out that taxation is dictated by economic conditions. The various crises may force Member States to increase their tax revenues and this is what will certainly be the driver for the future tax policies, in his view. In this regard, he advocated for a global minimum tax on billionaires’ net wealth.
Representing the tax profession in the debate, Bart Van Coile, President of the Belgian Institute for Tax Advisors and Accountants (ITAA), wished for a “new European Commission that builds on trust with taxpayers and intermediaries, especially regulated tax advisers and accountants that follow strong ethical codes of conduct”. EU legislators should prioritise preventing misconduct by unregulated intermediaries, simplifying tax laws and compliance for businesses and tax advisers and alleviating the burden on taxpayers struggling with evolving regulations, especially SMEs, he outlined.
The second panel, moderated by Jacomien van den Hurk, Director EU Public and Regulatory Affairs at PwC, touched upon the future perspectives for tax advisers in the EU. Panellists discussed in-depth the complexity of EU tax laws and the recent announcement of the European Commission to reduce reporting requirements for companies by 25%.
Ana Xavier, Head of Unit Economic Analysis of Taxation, Impact Assessment and Evaluation support at the DG TAXUD of the European Commission, invited the audience to reflect on the source of the high administrative burden when it comes to taxation, i.e. the fragmentation of tax systems in Europe.
This fragmentation generates complexity and costs implications, which can reach in some cases up to 54 billion € for corporate income tax compliance, she said.
For Sean Bray,Director of European Policy of Tax Foundation Europe, tax design and its purpose are of utmost importance. He regretted the often-overlooked fairness aspect and the potential scalability impact of complex tax legislation on companies, urging for a broader discussion on these issues within the European context.
Transparency and the increasing call for information on the companies’ tax strategy have also been addressed during the panel. Pascal Saint-Amans, Former Director of the OECD Centre for Tax Policy and Administration, Non-resident fellow at Bruegel, Partner at Brunswick,reflected on the evolution of tax perception over the past 15 years, from an “obscure technical topic left to specialists” to a highly scrutinized issue by society and governments. This shift has led to increased political interest and demands for transparency, prompting businesses to reconsider their approach to tax policy and risk management. He also emphasised the importance of reputation and societal duty alongside compliance, urging companies to prepare for forthcoming transparency requirements and consider their narrative and position on tax matters at the board level.
Finally, panellists discussed the impact of digitalisation and Artificial Intelligence (AI) on the work of tax advisers. In this regard, Florin Toma, Expert accountant and Member of the Body of Expert and Licensed Accountants of Romania (CECCAR), said we need to distinguish between the direct impact on tax advisers’ work and on their interactions with tax authorities in a digital environment. He acknowledged the potential of AI for certain repetitive tasks to enhance efficiency, accuracy, and predictive analysis in tax advisory work, potentially leading to cost reduction and freeing up time for strategic advice. However, he raised concerns about the future role of tax advisers in an environment increasingly driven by generative AI, emphasising the importance of continuous training and of the professional organisations to adapt to these technological trends and ensure the continued relevance of tax professionals. This is all the more important because tax advisers will be the ones helping SMEs going digital, he concluded.
Notes to editors:
Our event can be watched again online here: https://www.youtube.com/@etaf-europeantaxadviserfed6173
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64
On 17 April 2024 in Brussels, the European Tax Adviser Federation (ETAF) General Assembly unanimously re-elected Philippe Arraou (CNOEC) as President for another three years. Mr Arraou has been President of ETAF since its creation in 2015.
“It is a great pleasure for me to have been re-elected as ETAF President for another term and I warmly thank all ETAF members for their renewed confidence”, declared Philippe Arraou, ETAF President. “More than ever, I remain committed to advocate for balanced and fair EU tax rules, to support modernising the international tax system, and to champion strong, independent and regulated tax professions across Europe”, he added.
During its General Assembly, Volker Kaiser (BStBK), Michael Korth (DStV), Benoît Vanderstichelen (ITAA), Robert Sova (CECCAR) and Andrea Rabb (Moklasz) have also been re-elected for another three-year term in the ETAF Board.
The European Tax Adviser Federation (ETAF) is pleased to release a manifesto outlining key priorities for its members in view of the upcoming European elections. Divided into six pillars, the document sets out no fewer than 25 recommendations to the European Commission and the European Parliament for the next five years, to ensure that the EU tax system is simpler, rationalised and future-proof.
“As much as the EU matters for the tax profession, we do believe that the tax profession matters for the EU. Tax advisers play an important role in the tax collecting process in the Member States and create a relationship of trust between taxpayers and tax authorities. They have become over the years an indispensable guide for SMEs and individuals through the complexity of national and EU taxation. This fundamental role for the society as well as the benefits of professional regulation must finally be recognised and protected at EU level”, commented Philippe Arraou, ETAF President.
1. Promotion of professional regulation: we urge the European Commission to promote the development of national professional law frameworks and, in particular, encourage every EU Member State to regulate tax advising activity, ensure high levels of access qualification and continuous mandatory professional training, as well as set up professional organisations with mandatory membership and sanctioning competencies.
2. Safeguarding professional secrecy: we ask the European Commission and co-legislators to better protect professional secrecy in EU legislation by ensuring the respect of national rules as well as a fair treatment of the tax profession compared to lawyers and auditors when it comes to professional secrecy.
3. Rationalisation of EU reporting requirements: while welcoming the recent announcement from the current European Commission towards greater rationalisation of EU reporting requirements, we ask all EU legislative institutions to engage in a consistent and permanent reduction of bureaucratic burden.
4. The profession in the digital age: in the bloom of digital age, we advocate for the continuation of the principle “what’s illegal offline should be illegal online” and of the country of destination principle in order to keep the same professional, ethical, and quality standards as traditional tax advisers.
5. Develop tax education and tax honesty: we recommend to the next European Commission and European Parliament to create a holistic approach towards tax education, including encouraging Member States to adopt a tax education programme in secondary school, and to launch a reflection at EU level on how to achieve more tax honesty.
6. An inclusive approach to stakeholder engagement: while recognising the continued efforts of the European Commission and the European Parliament to engage with the public, we advocate for a more inclusive, comprehensive and structured approach to stakeholder engagement, ensuring that the voices of experts and practitioners are heard effectively, for the sake of well-founded and effective EU policies.
Based on the above-mentioned recommendations, ETAF looks forward to engaging in constructive dialogue with future policy makers on how to make the EU tax system simpler, rationalised and future-proof EU.
The full manifesto can be accessed here.
Notes to editors:
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64
During a conference organized by the European Tax Adviser Federation (ETAF) on Wednesday 29 November 2023 in Brussels, tax advisers, together with representatives from the OECD, the European Commission, the Spanish Presidency of the Council of the EU and the EU Tax Observatory, took stock of the progress made on the implementation of the OECD Two-Pillar solution.
In his introductory speech, Philippe Arraou, ETAF President, traced back the genesis of the OECD Two-Pillar solution and outlined the role tax advisers have to play in the implementation of the 2021 landmark agreement.
“It is our responsibility to provide clear and practical advice to our clients, to help them navigating the complexities of these new rules in order to comply. And it is the responsibility of policy makers to give us the right tools to do so, with enough guidance and certainty in the legal texts”, he said.
Pillar Two has become a reality
“The global minimum tax is already a reality. It certainly will be from the 1st of January in many countries”, David Bradbury, deputy director of the OECD Centre for Tax Policy and Administration, said. The OECD indeed estimates that 55 jurisdictions are now taking steps towards introducing a minimum 15% effective tax rate for large multinational enterprises.
It is admittedly far from the totality of the 145 members of the OECD Inclusive Framework on BEPS which committed to do so but “we do not need 100% of the countries to implement the global minimum tax to be globally effective”, Mr Bradbury stated. The OECD estimates that by 2025, when the Under-Taxed Payments Rule (UTPR) will begin to take effect, around 90% of in-scope MNEs will be submitted to the global minimum tax.
The EU would ideally like to see more non-EU jurisdictions implementing Pillar Two, Reinhard Biebel, Head of the Unit Direct Tax Policy and Cooperation at DG TAXUD of the European Commission, said. In the EU, the transposition is going “more or less fine” and, so far, the Commission is very optimistic that EU Member States will transpose the Directive in a comprehensive way by the end of the year. Mr Biebel nevertheless recalled that some EU Member States will opt-in to the delayed application of the Income Inclusion Rule (IIR) and the UTPR, foreseen in article 50 of the Directive.
Jorge Alberto Ferreras Gutiérrez, financial counsellor at the Permanent Representation of Spain to the EU, gave an insight on the work undertaken in the Council under the Spanish Presidency, in particular on the recent statement adopted at the November Ecofin Council. The statement will bring more certainty to taxpayers, as it confirms that the OECD administrative guidance is compatible with the EU Directive and stresses the need to consistently implement the guidance throughout the EU, he explained.
Representing the tax profession in the debate, Christoph Marchgraber, partner at KPMG and member of the Pillar Two Working Group of KSW, said that most of the companies didn’t start the implementation when the OECD Model Rules or the EU Directive were published but only more recently, when their draft national transposing law was published.
Mr Marchgraber further detailed the practical challenges faced by tax advisers in the implementation of the new rules, such as the adaptation of the financial reporting process to start with the Pillar Two calculations. “The first hurdle for most companies and for us, tax advisers, is the huge amount of information and rules that you have to cover to understand what Pillar Two is all about”, he said.
Pillar One cannot fly without the US
Turning to Pillar One of the OECD agreement, which will reallocate taxing rights over multinational enterprises from their home countries to the markets where they generate profits, panelists largely recognized that the publication of the Multilateral Convention (MLC) on Amount A is a major step forward, even if some issues still need to be resolved. Mr Bradbury hoped that the MLC could be opened for signature in the first half of next year.
Speakers also addressed the elephant in the room, i.e. the current uncertainty around the signature of the United States. Mona Barake, postdoctoral researcher at the EU Tax Observatory, explained that because of the “critical mass” condition, Pillar One could not enter into force without the US. Even, without this condition, revenues would be too little as the reallocation of profits will mostly come from US MNEs, she said.
Importantly, Mr Biebel announced that the Commission will not propose an EU Directive implementing Pillar One. “There were, quite frankly, some discussions internally, but it doesn't make sense having a multilateral convention in place that has to be signed and ratified and on top of it have something like a European directive”, he said. He also clarified the link between the OECD Pillar One and the recent Business in Europe: Framework for Income Taxation (BEFIT) proposal.
Finally, the discussion also addressed the recent vote to start negotiations at the UN on a framework convention on international tax cooperation, the possible impact it could have on the work of the OECD on the Two-Pillar solution and the importance to have a common position of the EU on this.
Notes to editors:
Our event can be watched again online here: https://www.youtube.com/@etaf-europeantaxadviserfed6173
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64
The Croatian Chamber of Tax Advisers (HKPS) became member of the European Tax Adviser Federation (ETAF) on 1 July 2023. All ETAF members are delighted about this decision and looking forward to a constructive and fruitful collaboration with HKPS.
HKPS, which was founded in Zagreb in November 2011, meets all the ETAF admission requirements, including that the tax profession is regulated by law.
The decision to accept the application of HKPS as an observer member was taken unanimously on 28 June 2023 during the ETAF General Assembly in Brussels. On this occasion, delegates to the General Assembly were happy to welcome the President of HKPS, Damir Brajković, as a guest.
Notes to editors:
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64
On 28 June 2023, the European Tax Adviser Federation (ETAF) organized a conference in Brussels on the tax profession’s perspective on the upcoming Directive to tackle the role of enablers that facilitate tax evasion and aggressive tax planning (Securing the Activity Framework for Enablers – SAFE).
In his welcome address, ETAF President Philippe Arraou recalled that since the last ETAF conference on SAFE exactly one year ago the European Commission’s thinking has evolved and so did ETAF’s position.
The Commission has now made up its mind between the different options proposed in its public consultation and the main components of the SAFE proposal have been publicly unveiled:
“The real question is: will the Commission deliver on its promise to only target the “rotten apples”? And how could it define aggressive tax planning without interfering with the work of law-abiding tax advisers?”, Philippe Arraou asked.
Initially planned for release in June 2023, the proposal has been indefinitely postponed, which has created a lot of uncertainties among tax stakeholders. The ETAF conference was nevertheless the opportunity for the speakers and the audience to publicly expose their expectations on this important proposal for the tax profession.
In his keynote speech, ETAF Head of office, Michael Schick, stated that to tackle the core of the problem and avoid disproportionate bureaucracy, it is necessary to target non-regulated tax professionals, operating outside any binding professional law framework, and to strictly limit the material scope to complex structures in non-EU countries.
“For countries in which there is zero regulation of the tax profession we understand that SAFE has a real potential, it will at least pose some ground rules and we clearly see the benefits here. For countries, like our members, who already have stronger rules, this can enter in contradiction with our own rules and potentially lower them”, he explained.
MEP Paul Tang, Chair of the FISC subcommittee of the European Parliament asked for some “sympathy” towards the European Commission and the delay of the proposal. “It is already a difficult job to try to define what is aggressive tax planning and what’s not, but so is trying to find a political support for it (…). It needs to be carefully introduced to have a chance”, he said.
For Manon François, Researcher at the EU Tax Observatory, SAFE would help having a more consistent framework for enablers. She also advocated for getting more information from the multinationals firms directly and enlarge the scope of the country-by-country reporting.
During the panel discussion moderated by Elodie Lamer, journalist for Tax Notes, there was a broad consensus that the SAFE proposal should target the “bad apples” and that we need a clear and practicable definition of aggressive tax planning.
Even if he admitted that you can have a “lighter touch” for countries that are already regulated, MEP Paul Tang argued for a broad regulation and registration. He also advocated for a disciplinary mechanism to make sure to get after the “enablers”.
Andrea Rabb, ETAF Board member and Vice-President of International Affairs of ETAF Hungarian member Moklasz said that, from her point of view, what the Commission wants to do with SAFE is not a genuine regulation. “Regulation is more. Regulation is about giving quality standards for the profession in each Member State and security to the Market”, she said.
She also warned that an EU register could run against the strong requirements set by countries who already regulate the tax profession and create a risk of counterproductive levelling down of qualified tax experts.
“Regulated EU tax professionals have their own national registers which is not a simple procedure but requires serious preconditions like successful exams, professional experience, continuous training, etc. We don’t think that a simple voluntary registration without any requirements attached to it should be treated the same way as it is done in EU countries with regulated professional rules”, she explained.
On the same day, in the ECON committee of the European Parliament, EU Tax Commissioner, Paolo Gentiloni, publicly recognized that without any progress on the UNSHELL proposal laying down rules to fight the misuse of shell entities and currently blocked in the Council of the EU, it is very difficult for the Commission to come up with the SAFE proposal.
For MEP Paul Tang, the link between the UNSHELL and the SAFE proposals is not obvious. However, he remained confident that the Commission will come forward with the SAFE proposal in the next half year.
Notes to editors:
Our event can be watched again online here: https://www.youtube.com/@etaf-europeantaxadviserfed6173
Our position paper on the SAFE proposal can be consulted here: https://etaf.tax/wp-content/uploads/2022/07/ETAF_position_paper_on_SAFE.pdf
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64
From June 2022 to January 2023, a German member of the European Tax Adviser Federation (ETAF), the Bundessteuerberaterkammer (BStBK), conducted a Europe-wide survey on the regulation of tax advisory professions in Europe. 23 professional organisations from 21 different countries participated.
The aim of the survey was to provide a comprehensive picture of the existing landscape of professional regulations in Europe in order to identify overlaps and common grounds, and in fine to find solutions for the tax advisory sector, which has come under increased attention due to several international tax revelations in recent years.
Participating organisations were asked about general professional characteristics, conditions of access to the profession, organisational structures, existing registration requirements, the framework of exercising the profession, professional obligations as well as supervision and possible sanctions.
The results clearly show that the landscape of tax advisory professions in Europe is very broad and differentiated. Nevertheless, the authors also found that in many countries there are more regulatory systems than often assumed. The regulatory approaches studied range from a (voluntary) membership in a professional organisation, which usually requires a certain level of education and the compliance with a professional Code of Conduct, to the protection of a title or licence (by law) and reserving tax advisory activities to a certain profession.
In particular, the survey shows that Germany, Austria, Belgium, Croatia, the Czech Republic, Liechtenstein, Poland and Slovakia have similar strong regulatory systems in which members of the profession are (mandatory) members of a self-administered organisation, which itself is supervised by the State. In addition, the respective professions are also subject to national legislations and sanctions in case of misconduct. Moreover, the authors found that, in countries such as France or Portugal, where the title of tax adviser as such does not exist, highly similar regulatory systems are in place.
The results of the survey shall feed the current public debate around the regulation of the tax advisory profession in Germany as well as on the European and International levels.
Notes to editors
For media enquiries, please contact Ronja Heydecke, Junior Manager at BStBK | Email: [email protected] | Phone: +32 2 2350 100
Disclaimer
Although the authors have made every effort to ensure that the information gathered in this publication was correct and while this publication is designed to provide information about regulatory approaches concerning tax advisory professions in Europe, neither ETAF, nor the Bundessteuerberaterkammer K.d.ö.R., nor the authors assume responsibility for errors, inaccuracies or any other inconsistencies. The publication does not reflect the official position of ETAF nor should it be taken as a written statement on behalf of ETAF.
The European Tax Adviser Federation (ETAF) welcomes today's agreement between EU Member States on the Implementing Directive on Pillar Two of the OECD agreement to reform the international tax system by introducing a minimum 15% effective tax rate for large multinational enterprises (MNE).
The agreed rules will apply to any large group, both domestic and international, which meets the annual threshold of more than €750 million of consolidated revenues in at least two of the four preceding years, and with either a parent company or a subsidiary situated in an EU Member State. The final text delays the application of the new rules from 1 January 2023 to 31 December 2023, with the Undertaxed Profit Rule (UTPR) coming into effect in 2024.
“Hungary and Poland have made a sensible choice by lifting their vetoes on this important file”, reacted ETAF President Philippe Arraou. “We thank the French and the Czech Presidencies of the EU Council for leading these difficult negotiations and for sticking to the OECD tax deal and model rules as much as possible”, he added.
The blockade of this file for several months has created a lot of uncertainties for taxpayers. We are still of the opinion that the statements inserted in the text referring to the OECD Commentary to the model rules and the Implementation Framework (which still has to be released) simply as a “source of illustration or interpretation” are not enough to maintain the full alignment of EU rules with the OECD ones as time passes. However, we believe that the empowerment of the Commission to adopt delegated acts “in order to supplement certain non-essential elements of this Directive” could help bringing more legal certainty.
The success of the global minimum tax reform inevitably relies on its worldwide implementation. In this regard, a special attention should be given to the proposed US corporate tax and its alignment with what has been agreed at the OECD level.
As stated in our feedback to the European Commission, ETAF would have supported a sunset clause to be introduced in the text, to ensure that if a significant number of our big international partners don’t comply with the deal, the Directive will automatically cease to apply in order not to put European companies at a disadvantage.
“In Europe, tax advisers must stand ready and prepared to any future development, including a lowering of the threshold and the event of an application of the new rules to smaller companies”, concluded Philippe Arraou.
Next step: the implementation of Pillar One
Now, all efforts must be put on ensuring that the agreement on finding a solution to tax the digital economy (Pillar One) becomes a reality in the EU and worldwide.
“The pressing need to modify the international tax system in this area remains valid and we look forward to the finalisation of the Multilateral Convention”, said Phillippe Arraou.
In this regard, ETAF welcomes the EU Council statement annexed to the text confirming Member States continuous support for the OECD work on Pillar One and saying that it will re-evaluate, if needed, the situation of Pillar One in the OECD “with a view to ensuring a swift solution on the tax challenges arising from the digitalization of the economy.”
Notes to editors
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64
During a conference organized by the European Tax Adviser Federation (ETAF) on 7 December 2022, tax advisers discussed with Patrice Pillet, Head of Unit VAT at the European Commission, how the package “VAT in the digital age” (ViDA) will affect our profession and what are its expected benefits, just one day before its official adoption on 8 December.
In his welcome address, ETAF President Philippe Arraou spoke about the impact of e-invoicing on the profession. “Electronic invoicing, associated with necessary regulatory changes, will undoubtedly modify the landscape of our profession. And we are quite ready for that!”, he said.
“We shouldn’t see digitalization only as a challenge for the profession. It will above all be an opportunity as it will allow us to continue to focus more on the core business of our work: the tax advice”, Mr Arraou added.
For this reason, ETAF very much welcomes and supports the staged approach on e-invoicing and digital reporting proposed in the new package.
The proposed quasi real time access to invoicing information through an EU central database would save EU businesses over 4.1 billion euros per year on average in compliance costs over the next ten years, Patrice Pillet estimated.
For Dr. Stefanie Becker, the ETAF representative in the Commission’s VAT expert group, the existing fragmentation of e-invoicing systems makes it really difficult for businesses to work cross-border and it is urgent to have a solution at EU level. “Every country has its own tax rules, its own tax administration, its own amount of fraud. So it is also important to have the possibility to build a system that nevertheless fits your own country needs”, she pointed out.
Olivier Hody, Tax Adviser ITAA and Partner at the Deloitte Global Tax Center Europe, highlighted the concerns of the profession with the entrance of new e-invoicing players on the market and the potential “uberisation risk”. “Some of these companies could step into compliance and accountancy activities. They are totally unregulated. So the question from ETAF members is how can we guarantee that we have the same degree of data confidentiality, professional secrecy and quality than for traditional tax professionals?”
The Commission is hoping that the VAT gap in the EU will decrease thanks to this new package of measures and that it will allow Member States to start again the talks on the VAT definitive regime. “The VAT definitive regime is still needed. But the reason why it is blocked is the lack of trust between Member States. VAT gaps in Europe are ranging from 1.4% to 35%. It is hard for us to convince a Member State with a VAT gap of 1% to get its VAT collected by another Member State with a 35% VAT”, Mr Pillet explained.
Speakers also discussed the two other pillars of the package: the updated VAT rules for passenger transport and short-term accommodation platforms as well as the introduction of a single VAT registration across the EU.
“Not everything will enter into force next year. It will be a process. The directive is really based on the idea of a roadmap composed of very easy reforms which can be put in place very quickly – like the single VAT registration – and longer-term reforms such as a central database on intra-EU invoices or the convergence of the domestic systems”, he concluded.
Notes to editors:
Our event can be watched again online here: https://etaf.tax/conferences/
The VAT in the digital age package has been published here: https://taxation-customs.ec.europa.eu/taxation-1/value-added-tax-vat/vat-digital-age_en
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64
