Weekly Tax News – 6 April 2020

How are tax administrations reacting to coronavirus?

On 31 March, the OECD has published a global reference document listing the measures taken by the different tax authorities to support taxpayers and businesses who are being impacted by the coronavirus. The tax measures included in the document are grouped into 4 categories: (i) additional time for dealing with tax affairs (extension of deadlines, deferral of payments, etc); (ii) quick refunds to taxpayers; (iii) temporary changes in audit policies and ways to provide quicker tax certainty; (iv) enhanced taxpayers services and communication initiatives. The aim of the document is to help tax administrations in considering domestic measures and in comparing them with measures taken by other administrations. The document will be updated over time as more information becomes available.

Commission’s proposal to authorize Italy to grant VAT exemption to micro businesses

On 31 March, the European Commission has proposed a Council implementing decision to allow Italy to continue until 2024 with the application of a tax derogation which grants an exemption from VAT to taxable persons with an annual turnover not exceeding €65.000. The request is motivated by Italy’s economic structure which is largely made up of very small businesses. The derogation was due to expire on 31 December 2019, but the Commission recognizes the beneficial effects of extending the derogation in terms of reducing the administrative burden for 1,3 million small businesses. The budgetary impact of the derogation is considered negligible.

European Commission opens application to payment service providers to help in fighting VAT fraud

On 27 March, the European Commission has published a call for applications for actors in the payment industry willing to be members of the expert group on the implementation of the legislative package to exchange and transmit payment data to combat VAT fraud. The mentioned legislative package has been adopted by the Council on 18 February 2020 and requires payment service providers to transmit information on cross-border payments originating from payers in the Member States and on the beneficiary of these cross-border payments. This information will then be centralised in a European database, the Central Electronic System of Payment information (“CESOP”), where it will be stored, aggregated and cross-checked with other European databases. All information in CESOP will then be made available to Member States’ anti-fraud experts via a network called Eurofisc. The transmission of data must begin on 1 January 2024.