Weekly Tax News – 11 March 2019

France to introduce new tax on digital giants

On 6 March, the French Minister of Finance, Bruno Le Maire, has unveiled the details of his proposal for a new tax on the digital economy to be applied in France. The proposal is similar to the Digital Services Tax proposed at EU level, including a 3% tax rate on revenues of digital companies that sell digital products from third parties, traffic in user data or sell digital advertising. The tax targets digital companies with global revenues of more than 750 million euros and sales in France of at least 25 million euros. The French authorities expect to generate revenues of €400 million in 2019, €450 million in 2020, €550 million in 2021 and €650 million in 2022.

Belgium raise the subject of taxation of aviation emissions

On Tuesday 5 March, at the Environment Council, the Belgian delegation argued for a European VAT on airline tickets, or a kerosene tax, to help the EU fight climate change. The idea was supported by four countries: the Netherlands (who are considering reintroducing a tax on airline tickets from 2021 and launched the debate at the ECOFIN on 12 February), France, Luxembourg and Sweden. In particular, Belgium requested that the Romanian Presidency organises a debate on this subject at the Environment Council on 26 June.

Commission investigates tax rulings issued by Luxembourg to Huhtalux

Competition Commissioner Margrethe Vestager opened an investigation against certain tax rulings issued by Luxembourg to the company Huhtalux S.à.r.l. which is part of the Finnish Huhtamäki group. Huhtamäki is a producer of food packaging and one of the biggest converters of plastics and paperboard into food and beverage containers in the world. Huhtalux used to receive interest-free loans from the Huthamäki group to then use them to give interest-bearing loans to other companies in the same group. The tax administration in Luxembourg ruled in 2009, 2012 and 2013 that Huhtalux’ taxable base should be adjusted as the firm was paying interest. According to the Commission Luxembourg was granting the company an advantage because Huhtalux is now paying less taxes than other similar companies.

ETAF Tax Conference “Future Trends of Taxation” on 20 March 2019

On 20 March 2019 in Brussels, representatives of the European Commission, Members of the European Parliament and academics will participate to the ETAF Tax Conference on “Future Trends of Taxation”. The panelists will discuss the last proposal of the European Commission to shift away from unanimity principle in tax, the tax objectives of the electoral programs and the impacts of Brexit on EU tax policy.