Weekly Tax News – 19 September 2022

ETAF reappointed as member of the Commission’s VAT Expert Group

On Monday 12 September, the Director-General for Taxation and Customs Union of the European Commission, Gerassimos Thomas, appointed Dr. Stefanie Becker and Benoît Vanderstichelen as members of the VAT Expert Group on behalf of the European Tax Adviser Federation (ETAF). Their mandate will begin on 1 October 2022, for three years. Dr. Stefanie Becker is a member of Bundessteuerberaterkammer (BStBK), with more than ten years of experience as a VAT specialist in national and international tax consulting. Benoît Vanderstichelen is a member of the Belgian Institute for Tax Advisors and Accountants (ITAA) and a Board member of ETAF, with more than thirty years of experience in national and international VAT consulting. The VAT Expert Group is responsible to advise the European Commission on the preparation of legislative acts and other policy initiatives in the field of VAT and to provide insight concerning the practical implementation of legislative acts and other EU policy initiatives in the field of VAT. ETAF has been a member of the VAT Expert Group since 2019 and is delighted to have the possibility to continue the work undertaken in the last three years within the group.


European Commission proposes two new energy crisis levies

During her State of the Union speech on Wednesday 14 September, the President of the European Commission, Ursula von der Leyen, unveiled a package of emergency measures to tackle the energy crisis. Two measures can be assimilated to new levies. The first one is a temporary cap in the revenues for low-cost electricity producers. The cap would be set at 180€ per megawatt-hour. It will allow Member States to capture the difference between this cap and the revenues of these generators and then redistribute this difference to households and businesses. The second one is a temporary mandatory solidarity contribution based on taxable surplus profits made in the fiscal year 2022 from the fossil fuel industry. It would be calculated on the basis of the taxable profits of fossil fuel companies in the tax year 2022 exceeding a 20% increase of the average taxable profits of the three previous tax years, at a rate of at least 33%. The Commission estimates that these two measures would raise more than 140 billons € for Member States. These emergency measures will be discussed on 30 September during an extraordinary Energy Council. But the procedure for adoption is reportedly already dividing Member States. For some, this is a fiscal measure and it should therefore be dealt with according to the voting rules on this matter, i.e. unanimity, rather than being subject to the qualified majority rule. Poland already publicly indicated its opposition to an EU-wide windfall tax on energy companies and its wish to have a unanimous decision.


European Commission announces relief package for SMEs

During her State of the Union speech on Wednesday 14 September, the President of the European Commission, Ursula von der Leyen, also announced a relief package of measures to support SMEs. As part of this package, the Commission will propose a “single set of tax rules for doing business in Europe” also known as BEFIT, she said. The BEFIT initiative is expected in 2023 and was supposed to be a reboot of the old Common Consolidated Corporate Tax Base. As part of this relief package, the Commission also announced a revision of the Late Payments Directive.


The presumption that an online intermediary is liable for VAT is valid, the ECJ Advocate General says

The European Court of Justice Advocate General Athanasios Rantos concluded, on Thursday 15 September, that the provision of the regulation implementing the VAT Directive providing that an online intermediary platform is, in principle, liable to pay VAT is valid (case C-695/20). This opinion follows a request for a preliminary ruling from the First-tier Tribunal (Tax Chamber) in Great Britain on the appeal lodged by Fenix International Limited against the Commissioners for Her Majesty’s Revenue and Customs. The Advocate General concluded that this disposition does not contain any restrictions on its scope or extent. No category of service is therefore excluded from its scope. Furthermore, the Advocate General said that the Council was right to take the view that it was entitled to provide further detail in relation to the VAT Directive vis-à-vis electronically supplied services for the purposes of ensuring uniform conditions for implementation. Accordingly, the Advocate General proposed that the Court confirm the validity of the relevant provision of the implementing regulation.


FISC mission to Dublin

A delegation of MEPs from the FISC Subcommittee of the European Parliament will be in Dublin from 19 to 20 September. They will meet with representatives of key institutions, such as the Department of Finance, the Revenue Commissioners and the Finance Committee and the Committee for Budgetary Oversight of the Irish Parliament, as well as stakeholders from the private sector, experts and civil society, according to a draft programme. The discussions should focus on topical international tax issues, such as the implementation of the OECD's two-pillar tax reform, the reactions to the Pandora Papers, the UNSHELL Directive, DEBRA, and other measures to combat tax avoidance and tax evasion. “The delegates from the European Parliament will travel to Ireland to discuss how the country can put a halt to the loss in tax revenues for its European allies, and become a driving force for a fair European tax system”, MEP Paul Tang, the chair of the FISC Subcommittee, explained. A press conference will be organised at the end of the delegation on Tuesday 20 September in the afternoon.