Weekly Tax News – 4 June 2018

ECOFIN approved new transparency rules on tax intermediaries but failed to agree on three VAT proposals

On 25 May, the ECOFIN adopted the new rules aimed at boosting transparency to prevent aggressive cross-border tax planning. The directive targets intermediaries such as tax advisors, accountants and lawyers that design and/or promote tax planning schemes. It will require them to report schemes that are potentially aggressive.

On the same day, the Finance ministers of the Member States failed to reach an agreement on three VAT-related dossiers. The Council was expected to approve measures to boost administrative cooperation in the area of VAT, to reduce the VAT rates of e-publications and to approve an optional reversal of liability to prevent fraud. These last two proposals are at the centre of a clash between France and Czech Republic, where Prague is opposing to the application of reduced VAT rates to electronic publications and Paris has so far been opposed to the reverse charge mechanism.

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Digital taxation: Luxembourg is uncertain on interim tax

Luxembourg’s Prime Minister Xavier Bettel debated the future of Europe with MEPs on Wednesday 30 May in Strasbourg. In his speech, Mr Bettel spoke in favour of taxing internet companies fairly. However, he expressed some concerns over the interim tax proposed by the Commission, calling for the avoidance of temporary solutions. Furthermore, he ventilated the idea of tax decreases as means to boost global competitiveness, without it resulting in tax dumping.

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Trump announced restrictions on steel and aluminium

On 31 May, the US Commerce Secretary, Wilbur Ross, announced the application to European products, from 1 June, of US customs duties of 25% on imports of steel and of 10% on imports of aluminium. The President of the European Commission Jean-Claude Juncker reacted stating that “the US now leaves us with no choice but to proceed with a WTO dispute settlement case and with the imposition of additional duties on a number of imports from the US." Commissioner for Trade Cecilia Malmström highlighted that the US measures clearly go against agreed international rules.

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