Weekly Tax News – 6 September 2021

European Commission to present its digital levy no matter what

The European Commission will present its proposal for a digital levy, after the G20 meeting in October, “no matter if there is an agreement or not” at the OECD, Commissioner for Budget Johannes Hahn said on Tuesday 31 August, in a debate with MEPs from the Committee on Budgets (BUDG). Last July, the Commission had indeed put on hold its work on a digital levy as a new Own Resource for the Union budget to support the finalisation of the agreement on the international tax reform, expected in October. This decision has been highly criticized by Budget MEPs who said that the Commission is in breach of the 2020 Interinstitutional Agreement which prescribes proposing three new EU sources of income by June 2021, to repay the EU’s post-pandemic recovery plan.

Emmanuel Macron in Ireland to discuss global corporate tax reform

The French President, Emmanuel Macron, was in Dublin on Thursday 26 August, to discuss with the Irish Prime Minister, among other things, the global tax reform negotiated at the OECD. At the end of the meeting, Mr Macron assured that he would “not put any pressure” on the Irish government to join the agreement while stressing the need for this reform. Irish Prime Minister, Micheál Martin, said that Ireland maintains reservations on some aspects of the reform but promised the country will continue to be constructive in the OECD discussions.

Togo and Barbados joined the agreement on international corporate tax reform

Barbados and Togo respectively signed on 12 August and on 31 August the joint statement of the G20/OECD Inclusive Framework on base erosion and profit shifting (BEPS), which sets out a new framework for international corporate tax reform. Before signing and participating to the work, Togo had to join the OECD/G20 Inclusive Framework and became its 140th member. 134 out of 140 jurisdictions have now signed the joint statement.

EU Court of Justice finds Portugal’s tax on imported second-hand cars illegal

On Thursday 2 September, the European Court of Justice (ECJ) ruled that a Portuguese registration tax for imported second-hand vehicles violates the principle of free movement within the EU because it treats imported cars differently from cars already in Portugal. "By excluding the depreciation of the environmental component of the calculation of the value applicable to used vehicles put in circulation in Portuguese territory and purchased in another member state (…) the Portuguese republic has failed to fulfil its obligations under Article 110" of the EU treaty, the court said. The court concluded that although the Member States are free to determine the rules for calculating the registration tax in a way that takes into account considerations linked to environmental protection, any form of discrimination, direct or indirect, against imports from other Member States must be avoided.

DSA: vote in IMCO committee planned on November 8

The work on the Digital Services Act (DSA) is advancing. MEP Christel Schaldemose (S&D, Denmark), the rapporteur on this file, is working on her amendments and aiming to get a vote in the European Parliament’s Committee on the Internal Market and Consumer Protection (IMCO) on November 8 and in plenary in December.