Weekly Tax News – 13 January 2020

The European Parliament pushes for common EU approach on international tax

On 18 December, during the plenary session in Strasbourg, MEPs adopted a resolution on "Fair taxation in a digitalised and globalised economy" calling for a common EU approach for ambitious international tax reform at the OECD. In her draft, Irene Tinagli (S&D Italy), chair of the ECON Committee, claims that the European Commission and the Member States should agree on an ambitious position and should speak with one voice at international level. Furthermore, she supports the commitment of the Commission to propose a new European solution if an international agreement is not reached by the end of 2020.

Paris and Washington still debating on digital taxation

On 7 January, the French Finance Minister Bruno Le Maire announced that France and the United States have given themselves 15 days to reach a compromise on digital taxation at OECD level. Le Maire warned that during these two weeks the US will not impose any sanctions on imports from France. The EU Trade Commissioner Phil Hogan confirmed that “the European Commission will stand together with France and all of the Member States who wish to have the sovereign right to impose digital taxation in a fair way”. France is not the only country that has introduced a digital tax: Italy and Austria have recently implemented a similar form of taxation, while the United Kingdom and Czech Republic are planning to do the same.

The tax priorities of the Croatian Presidency

On 1 January 2020, Croatia took over the rotating Presidency of the Council of the European Union from Finland. The Programme of the Croatian Presidency includes a paragraph on taxation policy which reflects the priorities stated by the von der Leyen Commission. In fact, it marks the urgency to adapt the current tax rules to globalization and digitalization in order to ensure fair taxation where value is created. Furthermore, the Programme highlights the need for a tax system with higher levies on products whose adverse effects significantly contribute to climate change. Finally, the Croatian Presidency is committed to work towards ensuring tax transparency and security, at the same time preventing unfair tax practices, tax fraud and tax evasion.

ETAF participates to European Parliament’s hearing on liberal professions

On 8 January 2020, the President of the European Tax Adviser Federation, Philippe Arraou, participated to a hearing organised by the EPP group of the European Parliament. The hearing with the title “Liberal Professions in Europe – What challenges lie ahead?” focused on recent Single Market legislation and their impact as well as long-term strategies for a better enforcement of Single Market rules. Mr Arraou pointed out that ETAF supports independence and high-quality standards of national regulatory frameworks for tax advisers. He stressed the fact that the market for tax advisers is open at EU level and that the only obstacles are language barriers and the complexity of the different tax systems. Mr Arraou questioned the infringement procedure initialised by the Commission against Germany in order to limit the reserved activities of German tax practitioners since this would lower the quality of tax adviser services in Germany by giving the activity into the hands of unqualified service providers. Furthermore, Mr Arraou urged the decision makers to maintain the confidentiality principle for tax advisers because it forms the basis of the work of tax advisers. Finally, he raised the contradictory policy of the Commission, where DG GROW continues with proposing deregulation, while DG TAXUD demands a high-quality and compliance-oriented tax service.