Weekly Tax News – 20 January 2020

The European Parliament’s resolution on the European Green Deal

On 15 January, in the course of the plenary in Strasbourg, the European Parliament has approved its resolution on the European Green Deal. Amongst other topics, the MEPs have welcomed the European Commission’s proposal to review the Energy Taxation Directive and called on the Commission to design coordinated measures to close tax exemptions for aviation and maritime fuels in the Member States. The resolution also highlights that the fight against tax fraud, tax evasion, aggressive tax planning and money laundering has an important role to play in reaching the objectives of the European Green Deal and shaping a fair society and a strong economy.

VAT for SMEs: the European Parliament in favor of simplification

On 15 January, the European Parliament has approved by a large majority its opinion on a directive to simplify VAT for small and medium-sized businesses (SMEs). The ECON Committee did not propose any amendment to the approach settled by the EU Council. On the basis of this text, the delivery of goods and services by SMEs with a national turnover below €85.000 may be VAT-exempted. Furthermore, Member States that allow this exemption for companies established in their territory will be required to apply the exemption to deliveries made in their territory by companies established in another Member State (if the turnover of the latter from EU-related activities does not exceed €100.000).

ECOFIN to discuss taxation of the digital economy

The topic of taxation of the digital economic will be debated again at ECOFIN level on 21 January. The discussion, requested by Luxembourg, aims at taking stock of the state of the negotiations which is in a crucial phase, before the next OECD meeting on 29-30 January. Another point to be discussed are common elements for EU Member States to address in the OECD negotiations. Furthermore, the finance ministers could also address pillar II of the reform, on minimum taxation for multinational companies (already supported by France and Germany). Due to the current tensions between France and the United States, the French Minister Bruno Le Maire is expected to look for support from other EU Member States.

Italy adopts its digital services tax

Following the publication in the official gazette, the Italian digital services tax is effective starting on 1 January 2020. Following the example of France, Italy has decided to adopt a version of the digital tax that mirrors the one proposed by the European Commission. It imposes a 3% tax on Italian gross revenues deriving from advertising services, data transmission, intermediation and marketplace. The tax applies to company that generates revenues of at least €750 million of which at least €5,5 million sourced in Italy from in-scope digital services.