Weekly Tax News - 10 October 2022

October 10, 2022

First meeting of the European Political Community in Prague

The leaders of 44 European countries met in Prague on Thursday 6 October for the inaugural meeting of the European Political Community (EPC), set up to establish a framework for relations between the European Union and non-member countries located on the European continent and sharing the same fundamental values. Launched on an idea of French President Emmanuel Macron, this platform for political coordination does not however replace any existing organisation, structure or process, nor does it aim to create a new one at this stage, according to a press release. Two issues dominated the leaders' discussions: peace and security, especially Russia's war in Ukraine with a speech by the Ukrainian President Volodymyr Zelensky, and the energy crisis. In concrete terms, the leaders reportedly did not decide on much, apart from the location of the next meeting in Moldova, in spring 2023. After that it will be Spain and the United Kingdom’s turn to host the European Political Community.

Adoption of the eighth EU package of sanctions against Russia

On Thursday 6 October the Council of the European Union formally adopted the eighth package of EU sanctions against Russia in response to its escalating strategy of military aggression against Ukraine. The package includes the introduction of a dynamic cap on the international price of Russian oil in the EU as well as an extension of the import ban on steel products that either originate in Russia or are exported from Russia. Moreover, the EU decided to add 30 individuals and 7 entities to the list of natural and legal persons subject to sanctions. The package also comprises a full ban of the provision of crypto-asset wallet, account or custody services to Russian persons and residents, regardless of the total value of those crypto-assets as well as a prohibition to provide IT consultancy services and legal advisory services to Russia. The relevant legal acts will soon be published in the Official Journal of the EU.

OECD releases a new progress report on Pillar I

During the 14th Plenary meeting of the OECD/G20 Inclusive Framework on BEPS on Thursday 6 October, delegates agreed to release a new progress report on the administration and tax certainty aspects of Pillar I for public consultation. This progress report details the rules on the administration of the new taxing right under Pillar I and the tax-certainty related provisions. It follows the release of a first progress report in July. Interested parties are invited to send their comments on this draft no later than Friday 11 November 2022. The Inclusive Framework will aim to finalise a new Multilateral Convention for implementation of Pillar I by mid-2023, for entry into force in 2024, it said. The OECD also published on the same day a new report on tax incentives and the global minimum corporate tax, which focuses on the need to reassess tax incentives in light of Pillar II.

MEPs want a fair and effective taxation of crypto assets

MEPs adopted a resolution on Tuesday 4 October calling for a better use of blockchain to fight tax evasion and for Member States to coordinate more on the taxing of crypto assets. The non-binding resolution, drafted by MEP Lídia Pereira (EPP, Portugal), says that crypto assets must be subject to “fair, transparent and effective taxation”. The resolution notably calls on the Commission to assess the ways in which the different Member States tax crypto assets and evaluate these methods, and identify the different national policies regarding the fight against tax evasion in the field of crypto assets. The resolution then also calls for a clear and broadly accepted definition of crypto assets and for a coherent definition of what would constitute a taxable event. Finally, the resolution says that national administrations must use all available instruments to facilitate efficient tax collection, and it identifies blockchain as one of these instruments.

FISC mission to Luxembourg

MEPs from the subcommittee on tax matters (FISC) of the European Parliament will travel to Luxembourg from 20 to 21 October 2022. The delegation, led by the Chair of the FISC subcommittee Paul Tang, will meet with representatives of the Finance Committee of the Luxembourgish Parliament, key representatives from the ministry of finance, as well as stakeholders from the private sector and civil society. The discussions will focus, amongst others, on the role of the Luxembourgish Parliament to ensure progress in the fight against tax fraud and aggressive tax planning as well as the role of intermediaries; the exchange of information in the area of cross border tax rulings and tax difficulties for cross-border workers and employers, according to a press release.


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