Weekly Tax News – 17 June 2019

ECOFIN removed Dominica from EU tax blacklist and discussed FTT

On Friday 14 June, the Economic and Financial Affairs Council decided to remove Dominica from the EU list of non-cooperative jurisdictions for tax purposes. As a result, the EU list now includes 11 jurisdictions: American Samoa, Belize, Fiji, Guam, Marshall Islands, Oman, Samoa, Trinidad and Tobago, United Arab Emirates, US Virgin Islands and Vanuatu. Furthermore, the Council was updated on the state of play regarding the Financial Transaction Tax (FTT), on the basis of a note by Germany. Member States have discussed the FTT based on the French model that applies a tax rate of 0,2% to be levied on the transfer of ownership when shares of listed public limited companies are acquired. The revenues of the FTT might be mutualised as a contribution to the EU budget. Finally, the Council adopted a report for the European Council on tax issues, as well as a report and conclusions on the work carried out by the Code of Conduct on business taxation.

G20 agree on the OECD’s work plan on international tax reforms

On Sunday 9 June in Fukuoka, the G20 Finance Ministers approved the progress made by the OECD on the tax challenges arising from the digitalization of the economy and the work plan aimed at an agreement on international tax reform by 2020. During a press conference, the French Finance Minister Bruno Le Maire expressed optimism on the possibility to reach an agreement on the two pillars proposed by the OECD (i.e. taxation of the digital economy and global minimum corporate tax rate). The United States acknowledged their disagreement on the unilateral measures to tax the digital economy taken by France and the United Kingdom.

Environmental tax called for by various EU actors

The issue connected with environmental footprint and climate change is making its way into EU tax policy. On Wednesday 12 June, the Members of the Commission for the Environment, Climate Change and Energy at the Committee of the Regions adopted an amendment that complements a draft opinion on the implementation of the Paris Agreement prepared by MEP Witold Stępień (EPP, Poland) calling for an end of tax exemptions on kerosene. On Thursday 13 June, the European Commissioner for Budget and Human Resources Günther H. Oettinger, asked the EU leaders to proceed and conclude the negotiations on the EU’s Multiannual Financial Framework. With regard to the issue of the own resources of the Euro area budget, Mr Oettinger already advocated for the introduction of a plastic tax (between 10% and 14%) in order to reduce the use of non-recyclable plastic.

OECD Handbook for fighting against money laundering and terrorist financing

On 13 June, the OECD has launched a new version of its “Money Laundering and Terrorist Financing Awareness Handbook for Tax Examiners and Tax Auditors”. The Handbook is a practical tool to enhance cooperation between tax authorities and anti-money laundering authorities providing updated money laundering indicators and new material to increase detection and reporting of terrorist financing. It includes a description of money laundering and terrorist financing activities so that tax examiners and auditors can better assist criminal investigators and guidance in identifying money laundering and terrorist financing during the conduct of normal tax audits.