Weekly Tax News - Monday 06 November 2023

November 6, 2023

EU Finance Ministers meet in Brussels

EU Finance Ministers will meet on Thursday 9 November in Brussels. They will notably discuss the economic governance framework and the economic impact of Russia’s aggression against Ukraine. Contrary to what was foreseen in the initial programme of the Spanish Presidency of the Council of the EU, the UNSHELL Directive is not on the agenda of EU Finance Ministers. The only tax file is the adoption, without discussion, of a Council statement on the OECD Two-Pillar solution, which would reportedly outline the need to ensure consistency with the OECD administrative guidance when applying the Pillar Two Directive. This statement would be a consequence of specific concerns raised by some Member States about the alignment of the Pillar Two Directive and the OECD administrative guidance. A statement by the European Commission would reportedly be added to the minutes of the Ministers’ meeting to state that the Commission believes that the OECD's administrative guidance is compatible with the EU directive. The Commission's statement would also say that it supports the ambition to have the agreement on Pillar One in force as soon as possible and call on Member States to swiftly sign and ratify the Multilateral convention.

FISC mission to Washington

A delegation of MEPs from the European Parliament’s subcommittee on tax matters (FISC), led by MEP Paul Tang (S&D, the Netherlands) travelled to Washington D.C. from 30 October to 1 November. The delegation met with representatives of the US Treasury Department, the Internal Revenue Service, the Congress, the United Nations, the International Monetary Fund, as well as with stakeholders from the private sector, civil society, experts, and journalists. The discussions focused on the implementation of the OECD Two-Pillar tax reform, the role of tax incentives in the Inflation Reduction Act, the Foreign Account Tax Compliance Act (FACTA), the exchange of tax information, the taxation of crypto-assets, and the US approach to combating tax evasion. "The FISC subcommittee made clear to the US Congress that the ship has sailed: with the EU and many other countries worldwide implementing a 15% minimum tax rate, Pilar 2 will become a reality”, MEP Paul Tang said in a press release, after the mission to Washington. “The delegation made clear that a multitude of Digital Service Taxes (DSTs) is much worse than Pillar 1. Yes, Pillar 1 rules are sometimes complex. But not having a common framework leads to less tax certainty and more compliance cost for companies", he added.

HOT feedback deadline extended until 21 December

The European Commission has extended until 21 December 2023 its deadline for stakeholders to give feedback on its proposal for a Directive establishing a Head Office Tax System for SMEs (HOT). According to the proposal, SMEs operating across borders through permanent establishments would have the possibility to handle their tax obligations through a single tax administration, namely that of their head office, instead of having to comply with the requirements of several tax systems. SMEs would calculate their taxes solely on the basis of the tax rules of the Member State in which the company has its Head Office. SMEs would simply file a tax return with the tax administration of their Head Office, which would then forward the return to the other Member States where the permanent establishments are located. The deadlines for feedback on the Business in Europe: Framework for Income Taxation (BEFIT) proposal and the proposal for a Directive on Transfer Pricing are currently set for 29 December but are still being extended every day until the texts are available in all EU languages.

FATF adds Bulgaria to its list of jurisdictions under increased monitoring

During its plenary meeting on Friday 27 October, the Financial Action Task Force (FATF) decided to add Bulgaria to its list of jurisdictions subject to increased monitoring. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies to counter money laundering within agreed timeframes and is subject to increased monitoring. The FATF list is taken into account when drawing up the European list of AML high-risk third countries.  On the same day, the FAFT also decided to remove Albania, the Cayman Islands, Jordan and Panama from the list. These countries and jurisdictions have committed to implementing an action plan to rapidly resolve the strategic shortcomings identified within the agreed timeframe. The next FATF Plenary will be held in February 2024.

OECD Tax Certainty Day 2023

The OECD Forum on Tax Administration is organising on Tuesday 14 November its Tax Certainty Day 2023. The event will provide an opportunity for tax policy makers, tax administrations, business representatives and other stakeholders to take stock of the OECD tax certainty agenda and move towards further improvements in dispute prevention and dispute resolution. In particular, the 2022 Mutual Agreement Procedure (MAP) Statistics and the 2022 MAP Awards will be presented during the event. A session on tax certainty under Pillar One and Pillar Two is also foreseen. The meeting is scheduled to take place virtually via Zoom. Requests to attend should be sent by 9 November 2023 via this link. The agenda can be found here.

ETAF conference on 29 November: registration is now open!

Register here: https://sweapevent.com/etafconferenceontheoecdtwopillarsolution

ETAF is a registered organisation in the EU Transparency Register, with the register identification number 760084520382-92.

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