Weekly Tax News – 6 May 2019

European Commission accepted petition on taxing kerosene

On Tuesday 30 April, the European Commission decided to register 4 new European Citizens' Initiatives. Amongst others, the Commission agreed on a petition proposing to Member States to introduce a tax on aviation fuel (kerosene). The organizers of the petition claim that the aviation sector enjoys tax exemptions despite being one of the fastest growing sources of greenhouse emissions. The calls to taxing aviation have gained momentum, after the proposals launched by Belgium and the Netherlands to have some sort of levy either on fuels or tickets.

OECD invite to comment on draft report on tax morale

On 10 April, the OECD launched an invite to public comments on its publication “What's driving tax morale? An empirical analysis on social preferences and attitudes towards taxation”. The report will be an update of a similar report already published in 2013, including a new business section that uses OECD tax certainty data to consider tax morale among businesses operating in developing countries. A consultation document is available for comments on the website of the OECD.

Focus on: the status of Country-by-Country Reporting at EU level

In the course of the next mandate, the European Commission is expected to relaunch its proposal for a public Country-by-Country Reporting (CbCR). Currently, the Council Directive (EU) 2016/881 of 25 May 2016 establishes that Multinational (MNE) Groups located in the EU or with operations in the EU, with total consolidated revenue equal or higher than EUR 750 million should file the CbCR. According to the Directive, since 5 June 2017 MNEs must file the CbCR in the Member State in which the ultimate parent entity of the MNE Group or any other reporting entity is a resident for tax purposes. The competent authority of the Member State that receives the report shall, by automatic exchange, communicate the report to any other Member States in which one of the companies of the MNE Group are either resident for tax purposes or subject to tax with respect to the business carried out through a permanent establishment. On April 2016, the European Commission proposed to further enhance the tax transparency of large multinationals, by obliging them to make their CbCR public. The proposal would require multinationals operating in the EU with global revenues exceeding EUR 750 million to publish key information on where they make their profits and where they pay their tax in the EU on a country-by-country basis. The same rules would apply to non-European multinationals doing business in Europe. The proposal was backed by the European Parliament in the following years that adopted its position on the proposal on March 2019, confirming the position already expressed in 2017. Nevertheless, the vote does not have the power to change the inaction on Council level, where the dossier is long blocked officially due to the disagreement between the Member States on the legal basis advocated by the Commission.