ETAF unveils its manifesto for upcoming European elections
On Tuesday 9 April, the European Tax Adviser Federation (ETAF) released a manifesto outlining key priorities for its members in view of the upcoming European elections. The document sets out 25 recommendations to the European Commission and the European Parliament for the next five years, to ensure that the EU tax system is simpler, rationalised and future-proof. ETAF notably urges the European Commission to promote the development of national professional law frameworks and, in particular, encourage every EU Member State to regulate tax advising activity, ensure high levels of access qualification and continuous mandatory professional training, as well as set up professional organisations with mandatory membership and sanctioning competencies. Other recommendations include: - better safeguarding professional secrecy in EU legislation by ensuring the respect of national rules; - ensuring a consistent and permanent rationalisation of EU reporting requirements by all EU institutions; - the continuation of the principle “what’s illegal offline should be illegal online” and of the country of destination principle in order to keep the same professional, ethical, and quality standards as traditional tax advisers; - create a holistic approach towards tax education and launch a reflection at EU level on how to achieve more tax honesty; - and a more inclusive, comprehensive and structured approach to stakeholder engagement.
European Parliament approves its internal reform
On Wednesday 10 April, the Plenary session of the European Parliament gave its final greenlight to its internal reform, which will start to apply after the EU elections. Initiated by the EP President Roberta Metsola and endorsed by the Parliament’s Conference of Presidents in January and December 2023, the revision process included a working group composed of representatives of all political groups. Among several changes, MEPs agreed on a new referral procedure which is supposed to allow for Commission proposals to be attributed in a more straightforward manner and thus to start the legislative work earlier. The Conference of Presidents will now also have the possibility to propose to Plenary to set up a temporary legislative committee to deal with especially broad crosscutting legislative proposals that would otherwise involve an unusually large number of committees. MEPs also introduced a new accountability mechanism for draft Council decisions addressing severe difficulties in Member States and a new concept of special scrutiny hearings to question Commissioners on an issue of major political importance. Changes to the process of confirmation hearings for Commissioners-designate have also been adopted to simplify the process.
Outcomes of ECOFIN Council meeting
During their meeting on Friday 12 April, EU Finance Ministers exchanged views and adopted conclusions on the implementation of the Recovery and Resilience Facility (RRF). The conclusions take stock of progress achieved in implementing the RRF and serve as political guidance to the Commission and Member States in the context of the mid-term evaluation of the RRF that the Commission submitted to the Council on 21 February 2024. The Council also took note of the state of play of the economic impact of Russia’s aggression against Ukraine and received an update from the Commission on the budgetary situation in Ukraine. Moreover, the Council approved the EU’s mandate for the G20 meeting of Finance ministers of 17-18 April 2024. Under any other business, the European Chief Prosecutor presented the work of the European Public Prosecutor’s Office (EPPO), in particular as regards detecting and bringing to justice large-scale criminal networks which committed national and transnational VAT fraud. She thanked Member States’ taxation and customs authorities for their valuable help in reporting suspicions of fraud. This led to the exposure and dismantling of cross-border criminal networks which had damaged the EU budget as well as national budgets to the extent of €11 billion, she said.
Member States discuss solutions for the taxation of cross-border teleworkers
The Belgian Presidency of the Council of the EU has reportedly set up a task force to examine with Member States, some selected third-countries, the European Commission and the OECD, possible solutions for the taxation of cross-border teleworkers. The task force already held two meetings in February and March while the third and final one is due to take place on 23 April. The possible creation of permanent establishments, the taxation of wages and the burden of proof regarding where the work takes place were reportedly the main themes discussed by the task force. Several countries would be in the opinion that the proper forum to deal with cross-border telework is the OECD, which is expected to address the issue in September. The European Commission may work on a temporary remedy until the OECD announces its solution. Based on the outcomes of these meetings, the Belgian presidency could present some solutions to the tax issues arising from cross-border telework for optional implementation by Member States.
European Parliament adopts its opinion on the Head Office Tax system proposal
On Wednesday 10 April, the European Parliament adopted its opinion on the proposal establishing a Head Office Tax (HOT) system for micro, small and medium sized enterprises. The proposal aims at giving SMEs operating cross-border through permanent establishments the option to interact with only one tax administration – that of the Head Office – instead of having to comply with multiple tax systems. In its opinion, the European Parliament supports the establishment of a one-stop shop and centralised procedures for filing returns, issuing tax notices and collecting tax. MEPs also believe that the Member State in which the SME has its Head Office should assist it in drawing up the tax return, in particular regarding the attribution of taxable result to each permanent establishment and subsidiary in other Member States. In particular, it calls for the implementation of this proposal to be accelerated from 1 January 2025, instead of 2026.
European Parliament adopts its opinion on the Transfer Pricing Directive
On Wednesday 10 April, MEPs adopted in plenary their opinion on the proposal for a Directive transposing the OECD Transfer Pricing Guidelines into the EU legal order. The opinion principally recommends to shorten by one year the entry into force of the Directive (2025 instead of 2026), to re-establish the EU Joint Transfer Pricing Forum and align as closely as possible to the latest OECD Transfer Pricing Guidelines, while acknowledging that space could subsequently be made for UN guidelines. Finally, MEPs want the Commission to be empowered to put forward further implementing rules on the matter rather than the Council. The opinion, spearheaded by MEP Kira Peter-Hansen (Greens/EFA, Denmark), was adopted by 438 votes to 99 and 63 abstentions. It will now be passed on to the Council for consideration.
MEPs ask European Commission to reconsider appointment of Markus Pieper as EU SME Envoy
Reportedly, more than 380 MEPs voted on Thursday 11 April in favour of asking the European Commission to reconsider the appointment of MEP Markus Pieper (EPP/Germany), as EU SME Envoy. The vote took place on the occasion of considering an amendment tabled by the Greens/EFA group to the European Parliament’s draft resolution on the discharge to be granted to the European Commission in the context of implementing the 2022 EU budget. European Commissioners Nicolas Schmit, Paolo Gentiloni and Thierry Breton, as well as EU High Representative Josep Borrell, reportedly sent a letter to the President of the European Commission requesting a debate in the College on the questions raised in the European Parliament about the appointment of Mr Pieper. The letter was sent after allegations that the two other shortlisted candidates scored better than Mr Pieper during the selection process and that one of them, MEP Martina Dlabajová (Renew Europe, Czech), has lodged a non-suspensive appeal with the Commission. The European Commission has repeated on several occasions that it has a margin of discretion in internal appointment procedures. Mr Pieper has signed his contract on 31 March and is due to take up his duties on Tuesday 16 April despite the non-suspensive appeal procedure and the European Parliament’s request.
France, Germany and Italy issue common recommendations to enhance European competitiveness
Bruno Le Maire, France’s Minister for Economy, Finance and Industrial and Digital Sovereignty, Robert Habeck, German Minister for Economic Affairs and Climate Action, and Adolfo Urso, Italian Minister of Enterprises and Made in Italy met on Monday 8 April to discuss perspectives to enhance European competitiveness. During the meeting, the three ministers agreed that EU industrial policy should combine a well-targeted support for strategic industries while fostering a high level of competition in the single market and reducing the bureaucratic burden, according to a press release. In particular, they committed to ensuring a stable and effective regulatory environment and to further reform, simplify and fast-track EU administrative procedures. They also call on the Commission to deliver an ambitious simplification programme eliminating overlapping regulation and reducing reporting obligations, primarily for SMEs and way beyond the Commission target of 25 %, based on a thorough assessment of the results of its “call for evidence” concerning the rationalisation of reporting requirements. The three ministers also want a strengthening of the “SME test” in impact assessments, by taking into account inflation development in the financial thresholds of the SME-definition and by adding a new company category of small mid-caps (250 – 500 employees) to extend the administrative exemptions already provided for SMEs.
ETAF Conference on 17 April 2024: last chance to register!
Register here: https://sweapevent.com/etafconference17april2024
