Weekly Tax News - Monday 11 September 2023

September 11, 2023

Tax agenda in the upcoming months

The Commission is expected to publish its Business in Europe: Framework for Income Taxation (BEFIT) on 12 September. Regarding the proposal to fight the misuse of shell entities in the EU (UNSHELL), the work resumed at the technical level on 5 September. The Spanish presidency aims to find an agreement on the proposal at the meeting of the ECOFIN in November. In a compromise proposal, the suggestion of the Spanish presidency was that the Directive should put its focus on the most obvious cases of abusive shell entities. Furthermore, the EU hopes to make progress on its VAT in the Digital Age (ViDA) package. Finally, Member States started to discuss the issue of minimum tax rates for energy products.

FISC-Subcommittee meeting on 19 September

The FISC-Subcommittee is organising a hearing on 19 September with the title “New EU common system for the avoidance of double taxation and prevention of tax abuse in the area of withholding taxes”. The focus of the first part of the hearing will be on withholding taxes as the proposed Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER) was recently published on 19 June 2023 by the European Commission. It will be followed by an exchange of views with Commissioner Paolo Gentiloni on tax matters. The last point of the FISC-hearing will focus on the draft report on "Role of tax policy in times of crisis" by MEP Kira Peter-Hansen (Greens/EFA). Members of the European Parliament recently looked into whether new, temporary taxation mechanisms could be used to contribute to the EU budget.

CEPS report 'EU corporate taxation in the digital era – The road to a new international order'

On 18 September 2023 the Centre for European Policy Studies will hold a seminar discussing how international cooperation on corporate taxation can be achieved and how Pillar Two will be implemented in Europe and coordinated with BEFIT. In February 2022 a CEPS Task Force organised a working group consisting of industry experts, academia, EU institutions and national authorities in order to analyse the two-Pillar solution agreed at OECD level. The report 'EU corporate taxation in the digital era – The road to a new international order' examines the critical points in the design of the two-Pillar solution agreed at OECD level. The main focus is primarily on Pillar Two as there has been significantly more progress than Pillar One. The report puts forward concrete recommendations on how to improve the functioning of Pillar Two and how to implement the Business in Europe: Framework for Income Taxation (BEFIT) in the EU, emphasizing the importance of simplicity, the reduction of compliance costs and uniformity.

IMF: reliance on lists of high-risk countries for AML purposes is not enough

On 4 September the IMF published a technical assistance report on the Nordic-Baltic region. The purpose of this analysis was to examine cross-border money laundering threats and vulnerabilities in the Nordic-Baltic region as recent money laundering cases have shown risks from cross-border payments to the Nordic-Baltic financial sector. The IMF recommended that the countries should not solely rely on international lists of high-risk countries for anti-money-laundering (AML) purposes. While the European Commission's AML list and the Financial Action Task Force (FATF) lists “are useful, sole reliance on such lists misses the country-specificity for a comprehensive supervisory risk assessment,” the IMF stated in its report. The report together with its analysis on the Commission and the FATF AML lists could be helpful for Baltic-Nordic countries which are part of the EU as the whole EU is currently evaluating its AML framework. Furthermore, the European supervisory authorities recently discovered weaknesses in the EU’s AML approach toward third countries. Hence, European tax experts are discussing whether third countries effectively implementing international AML standards could be a benchmark of a future beneficial ownership criterion for the list of non-cooperative jurisdictions for tax purposes.

EU Tax Symposium on 24-25 October 2023: Registration is now open

On 24 October (afternoon) and 25 October 2023 (full day), the European Parliament will co-host with the European Commission the second EU Tax Symposium, under the theme “The future of taxation in the EU: challenges ahead & changes needed”. The event will bring together Finance Ministers, European and national Parliamentarians, high-level policy makers, academics and civil society representatives to discuss the tax mix for the future, decision-making on taxation, corporate income tax and the role of taxation in the promoting competitiveness and fairness. The registration is now open.

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