Main highlights of Executive Vice-President-designate for Prosperity and Industrial Strategy’s confirmation hearing
On Tuesday 12 November, Stéphane Séjourné, the Executive Vice-President-designate for Prosperity and Industrial Strategy faced a multi-committee confirmation hearing. During his introductory remarks, Mr Séjourné outlined his vision of industrial prosperity as critical for Europe’s competitiveness. He emphasized that, without rapid advancements in this area, Europe risks falling behind globally. To close the existing funding gap, he proposed the creation of a Competitiveness Fund within the EU’s next Multiannual Financial Framework (MFF) and supported a Savings and Investment Union to increase private investment in Europe. Additionally, he stressed the importance of implementing the green deal industrial plan, aiming to decarbonize and enhance European competitiveness. Mr Séjourné also announced plans for a future Pact on Clean Industry, focusing on high-impact sectors like steel, which face challenges from high energy costs and Chinese market pressures. He also promised to reduce bureaucratic burdens on businesses, especially small and medium-sized enterprises (SMEs). Throughout the hearing, he emphasized simplifying EU regulations without compromising high environmental and social standards. This simplification, he argued, would particularly benefit smaller businesses and public authorities, easing access to public procurement opportunities. He also reassured MEPs of his dedication to uphold the EU’s Green Deal commitments and climate goals, pledging that his focus on reducing bureaucracy would not mean deregulation.
European Commission refers Germany to Court over discriminatory tax treatment of capital gains in real estate
The European Commission decided on Thursday 14 November to refer Germany to the Court of Justice of the European Union for having failed to remedy the infringement of the free movement of capital due to a discriminatory tax treatment of reinvested capital gains upon sale of real estate located in Germany. Germany grants a deferral of taxation for reinvested capital gains made on the sale of real estate located in Germany, provided that the real estate has been attributed to the fixed assets of a domestic permanent establishment for an uninterrupted period of at least 6 years. Corporations established in Germany, even without a business activity therein, are deemed to have such a permanent establishment at their place of management (i.e. in Germany). Comparable corporations established in other EU/EEA Member States are deemed not to have such permanent establishments in Germany. Hence, Germany denies providing them with a tax deferral for reinvested capital gains from the alienation of German real estate. As a consequence, Germany violates the free movement of capital, in the Commission’s view. The Commission already sent a reasoned opinion to Germany in November 2019 and engaged in further technical exchanges with the German authorities. However, it considers that efforts by the authorities have, to date, been insufficient and is therefore referring Germany to the Court of Justice of the European Union.
New web portal on the special VAT regime for SMEs is live
The web portal with more information on the SME scheme is now live, the European Commission announced on Tuesday 12 November. The special VAT regime for SMEs, which will enter into force on 1 January 2025, will allow SMEs to sell goods and services without charging VAT to their customers (VAT exemption) and alleviate their VAT compliance obligations. Any small enterprise with a total annual turnover of no more than EUR 100 000 (or the equivalent in national currency) in all Member States, for the current and previous calendar year, is eligible for VAT exemption in its Member State of establishment (MSEST) and/or in other Member State(s) under the cross-border SME scheme. The SME scheme is optional. Non-EU small enterprises cannot apply the SME scheme. The web portal contains a series of information, FAQs, contacts country-by-country as well as an SME VAT Simulator.
European Parliament wants Russia to be added to the EU AML blacklist
During the European Parliament’s Plenary session on Wednesday 13 November, the majority of political groups called on the European Commission to add Russia to the EU anti-money-laundering (AML) blacklist, citing organized crime and its war in Ukraine as key reasons. MEPs stressed the urgency of closing Russia’s funding channels for terrorism and war. They highlighted Russia’s systemic issues with money laundering, corruption, and weak financial oversight, which threaten EU security. Some MEPs criticized international resistance, notably from India, China, and South Africa, to designating Russia as high-risk globally. EU Financial Services Commissioner Mairead McGuinness recalled that the EU is following the recommendations of the Financial Action Task Force (FATF) and that there is currently no expectation that a FATF consensus on listing Russia is found in the near future. However, she also recalled that the EU has the right to consider an autonomous listing and she assured that if the Commission decides that Russia should be included, the European Parliament and the Council of the EU will be fully involved in the process.
OECD 2024 Tax Administration report
The OECD published on Wednesday 13 November its 2024 Tax Administration report, which provides comparative information on advanced and emerging tax administrations globally and seeks to draw out some of the trends and challenges they face. Its purpose is to assist administrations, governments, taxpayers and other stakeholders towards identifying improvements in the effectiveness of tax administration. The 2024 edition includes performance-related data, ratios and trends up to the end of the 2022 fiscal year. For the first time since 2019, this edition also examines in more detail the administrative, operational and organisational practices of participating tax administrations. Finally, it contains a special feature which explores how tax administrations are estimating tax gaps. The underlying data for this report comes from the International Survey on Revenue Administration, and in certain areas it also uses information from the Inventory of Tax Technology Initiatives.
