Spain presents its priorities for the rotating Council presidency
The Spanish Presidency of the Council of the EU, which is due to start on July 1st and run until the end of 2023, launched on Thursday 15 June its website and presented its priorities, which will be run under five headlines: - reindustrializing Europe and guaranteeing its open strategic autonomy; - adapt and move towards digital and ecological transition;- tackle the climate and environmental emergency; - consolidate the social pillar, greater social and economic justice; and - strengthening European unity. On the tax front, it is saying that “it will advocate for the establishment of minimum and common standards on corporate taxation in all Member States and will fight tax evasion by large multinationals”.
FASTER proposal to be released on 19 June
The European Commission will present its proposal for faster and safer withholding tax procedures in the EU (FASTER) this Monday 19 June. The proposal was initially expected on 28 June but, as other tax proposals, has been removed from the Commission’s indicative agenda. The problems the Commission aims to tackle with this initiative are the particularly burdensome withholding tax refund procedures for cross-border investors in the EU and, at the same time, the risks they present in terms of tax abuse, as demonstrated by the ‘Cum-Ex’ scandal. Leaked information in Tax Notes suggest that the proposal will allow Member States to choose between a relief-at-source system and a quick refund system with a set time frame. Member States would be able to decide which system to use, as long as one is put in place, and be free to choose whether to outsource the tasks to a withholding task agent. Member States would also be able to rely on a proposed digital tax residence certificate to confirm the EU taxpayers’ tax residency or a proof of residence from a non-EU country. To benefit from the relief at source or the quick refund, investors will reportedly need to contract with “certified financial intermediaries” that are included in a national register that Member States will have to set up.
First divisions on the ViDA package arise
EU Finance Ministers discussed on Friday 16 June the VAT in the digital age legislative package presented in December 2022 during a public session of the Ecofin meeting. Ministers were invited to express their views on the three following questions: - is there a need to address the fragmentation of the internal market and provide for a consistent framework of reporting based on e-invoicing for intra-EU and domestic transactions?; - Should platforms have an enhanced role in the collection of VAT in the short-term accommodation and passenger transport sectors to provide for more simplicity, better compliance and a level playing field? – Should the one-stop shop concept and the reverse charge mechanism should be enhanced to overcome the need for multiple VAT registrations for businesses that operate in the internal market? Globally, Ministers recognized that there is a need for a single coherent and harmonized framework for e-invoicing for intra-EU transactions but outlined the importance of maintaining existing efficient national e-invoicing systems as well as the need to take into account the impact it will have for taxpayers. Giving sufficient time to tax authorities to implement the new rules and paying a special attention to data protection have also been mentioned several times during the debate. The proposal from the Commission on short-term accommodation and passenger transport sectors has also raised some criticisms and concerns, notably on the possible adverse impact on the tourism industry. Spain said it will continue the work, with the aim to reach agreement before the end of its six-month Presidency of the Council of the EU.
European Commission consults on CBAM phase-in reporting obligations
The European Commission opened on Tuesday 13 June a public consultation on its future implementing regulation detailing the reporting obligations that will be required of importers under the Carbon Border Adjustment Mechanism (CBAM). The mechanism is due to come into force on 1 October and be in its transitional phase until 31 December 2025. During this period, companies will have to declare the emissions contained in their imports covered by the CBAM. The implementing regulation provides not only a methodology for calculating the emissions generated by manufacturing a given product but also details of the information to be provided by economic operators. Among other things, reporting requirements for EU importers would include the quantity and types of goods imported, as well as their country of origin, production routes, and specific direct and indirect emissions. Interested stakeholders have until 11 July to send their feedback to the European Commission.
EP adopts its report on Pandora Papers in full house
On Thursday 15 June, the European Parliament Plenary session adopted an amended version of the report authored by MEP Niels Fuglsang (S&D, Denmark) setting recommendations from the lessons learnt from the Pandora papers and other similar data leaks. The report makes a series of recommendations on protecting journalists and whistleblowers, reducing conflicts of interest, better regulating intermediaries, improving reporting and information sharing, better addressing practices that can harm tax collection such as through the use of crypto-assets, golden passports, shell companies, or certain real estate transactions. The report also takes aim at tax regimes designed to attract foreign nationals and digital nomads and calls for these regimes to be assessed. An EU version of the UK’s system to investigate unexplained wealth should also be considered, the report notably says. The final text can be consulted here.
FISC mission to the UK
MEPs of the FISC subcommittee of the European Parliament will travel to London from 19 to 20 June 2023, in order to meet decision-makers and stakeholders to discuss developments in the area of international taxation and the relation between the EU and the UK in this field. According to the draft programme, the delegation, led by the FISC Chair MEP Paul Tang, will meet with members of the Public Accounts Committee, the Treasury Committee and the All-Party Parliamentary Group on Anti-Corruption and Responsible Tax of the House of Commons, as well as HM Treasury Minister Baroness Joanna Penn and stakeholders from civil society, professional associations and academia. The discussions will focus on the implementation of the OECD/G20 international tax reform, UK efforts to combat tax evasion and avoidance and the role of intermediaries in the fight against tax evasion and tax avoidance. Moreover, discussions will also include tax policies in the UK post-Brexit and the impact on the EU, administrative cooperation, transparency rules and the future of financial service taxes, a press release says.
OECD launches peer-to-peer support for developing countries on the implementation of the Two-Pillar solution
On Tuesday 13 June, the OECD's Forum on Tax Administration (FTA) Pillar Knowledge Sharing Network held its first virtual meeting of what will be a series of peer-to-peer knowledge-sharing events where experts from tax administrations in early implementer jurisdictions will offer high-level practical advice and share lessons learned on administrative and implementation aspects of the Two-Pillar Solution. The first meeting, gathering more than 250 delegates from over 70 countries and jurisdictions, looked at how officials are working across policy, operations and technology to prepare for and implement the necessary changes, the OECD said in a press release. Further meetings will be held over the course of the year. The new Pillar Knowledge Sharing Network will complement the OECD's wider strategy for supporting developing countries in implementing Pillar One and Pillar Two through a multifaceted programme including training, guidance and hands-on country engagements, the OECD explained.
This newsletter contains information about European tax policies and developments gathered from official documents, hearings, conferences and the press. It does not reflect the official position of ETAF nor should it be taken as a written statement on behalf of ETAF.