Weekly Tax News – 25 January 2021

European Parliament wants a reform of European tax blacklist by the end of 2021

On 21 January, during the plenary session, the European Parliament adopted by a large majority (587 votes in favour, 50 against and 46 abstentions), a resolution asking for a reform of the European list non-cooperative tax jurisdictions. The resolution was prepared by the chairs of the ECON Committee, Irene Tinagli (S&D, Italy) and of the FISC subcommittee, Paul Tang (S&D, the Netherlands). MEP Tang addressed the current EU tax blacklist as “confusing and ineffective”. The MEPs highlighted that the list does not live up to its full potential as jurisdictions currently on the list cover less than 2 % of worldwide tax revenue losses. The resolution seeks to strengthen the list through increased transparency and consistency, stricter and more impartial listing criteria, and stronger defensive measures against tax avoidance. It calls for the Council and the Commission to reform the EU tax blacklist by the end of 2021 to protect the EU from any further revenue losses in the post-COVID 19 recovery period.

European Commission ready to work on a EU Digital tax

On 18 January, the European Commission has launched a full public consultation on a the EU Digital Levy. The public consultation closely follows the inception impact assessment launched few days before (14 January). The Commission should base its proposal either on article 113 or on article 115 of the TFEU and it is getting ready to the worst-case scenario in which the OECD/G20 negotiation (which has been mainly blocked because of the US position) should fail by the deadline of mid-2021. However, the future Secretary of the US Treasury, Janet Yellen has recently launched some positive signals about the international discussion on the taxation of the digital economy.

Still no majority at Council on public CbCR

On 22 January, a meeting of national experts of the Council was hold to discuss about a  possible agreement on the Commission’s long-standing proposal for a public country-by-country reporting (CbCR) that would require companies to publicly disclose certain financial information, such as their revenues. In spite of the fact that some Member States previously opposing to the proposal now turned towards abstentions, still no qualified majority was reached. The Portuguese Presidency, who has taken the commitment to work towards an agreement at Council level on the proposal, has therefore no basis to take the matter to the EU Council.