Follow the Maastricht debate on Monday 29 April
Candidates of the main European political parties are gathering in Maastricht on Monday 29 April at 7 p.m for a political debate ahead of EU elections. The debate, co-organised by Studio Europa Maastricht and POLITICO, will focus on three key themes, selected by European youth via a survey conducted by Maastricht University: Climate Change, Foreign and Security Policy, and EU Democracy. All the registered European Political Parties have been invited to send a candidate. The following candidates have confirmed their participation: Ursula von der Leyen (European People’s Party), Nicolas Schmit (Party of European Socialists), Marie-Agnes Strack-Zimmermann (Alliance of Liberals and Democrats for Europe Party), Bas Eickhout (European Green Party), Maylis Roßberg (European Free Alliance), Anders Vistisen (Identity and Democracy Party), Walter Baier (Party of the European Left) and Valeriu Ghilețchi (European Christian Political Movement). Register here to watch the Maastricht debate online. Another political debate among the lead candidates, organised by the European Broadcasting Union (EBU), will take place on 23 May in the afternoon, in the Parliament’s plenary chamber in Brussels.
EU Member States coordinate for UN tax discussions
Ahead of the first session of the ad hoc committee tasked with drafting terms of reference for a UN framework convention on international tax cooperation from 26 April to 8 May, EU Member States reportedly approved a joint EU position on Tuesday 23 April to coordinate their voices. The draft EU joint position reportedly says that the future UN convention should avoid inconsistent and competing lines of work and be a valuable addition to the international tax environment. Discussions and potential early protocols should focus on the least controversial topics, Member States said, without suggesting any potential work area within the UN. In a note to EU ambassadors accompanying the joint statement, the Belgian presidency of the Council of the EU said that some delegations were concerned about having a joint position for the UN meeting, arguing that tax is a national competence. Malta notably published an annexed statement emphasising its national competence on tax while acknowledging the necessity of a joint EU position.
Germany, Spain and South Africa Ministers bring their support to a global tax on billionaires
After French Minister Bruno Le Maire last week, it was the turn of Germany’s Minister for Economic Cooperation and Development Svenja Schulze, Finance Minister of South Africa Enoch Godongwana, Spanish Finance Minister María Jesús Montero and Spanish Minister of Economy, Trade and Business Carlos Cuerpo to support the Brazilian G20 proposal for a global tax on billionaires. In a column, co-written with Finance Minister of Brazil Fernando Haddad and published on Thursday 25 April, they said that a coordinated global minimum levy on billionaires would boost social justice and increase trust in the effectiveness of fiscal redistribution. It would generate much-needed revenues for governments to invest in public goods such as health, education, the environment, and infrastructure, the ministers argued. Estimates suggest that such a tax would potentially unlock an additional $250bn in annual tax revenues globally, they pointed out.
Last EP Plenary of the mandate gives final greenlight to the new AML rules
During its last Plenary session of the mandate, the European Parliament adopted from Monday 22 April to Thursday 25 April numerous informal deals reached between negotiators on files dealing with economic or financial services matters, including the package of laws strengthening the EU’s toolkit to fight money-laundering and terrorist financing. The package consists of the sixth Anti-Money Laundering (AML) directive (adopted with 513 votes in favour, 25 against, and 33 abstentions), the EU “single rulebook” regulation (adopted with 479 votes in favour, 61 against, and 32 abstentions), and the Anti-Money Laundering Authority (AMLA) regulation (adopted with 482 votes in favour, 47 against, and 38 abstentions). The laws still need to be formally adopted by the Council, too, before publication in the EU’s Official Journal.
MEPs oppose UAE’s removal from AML Blacklist
At its Plenary session on Tuesday 23 April, the European Parliament reportedly rejected, by 490 votes to 64 with 56 abstentions, the European Commission’s proposal to remove the United Arab Emirates (UAE) from the list of high-risk third country jurisdictions with strategic deficiencies in their anti-money laundering and combating the terrorist financing regimes. While recognising the undeniable improvements in the AML/CFT framework in the UAE, the European Parliament considered that the removal of the country from the list could nevertheless jeopardise the integrity of the EU’s financial system, taking into account the strong exposure of the European internal market to the UAE as a financial and commercial hub. It therefore believes that a more in-depth assessment of the risks and the effective reforms carried out by the jurisdiction is necessary before delisting the country. In March the Commission proposed a delegated regulation that would have removed the UAE, along with Barbados, Gibraltar, Panama, and Uganda, from the AML list, and would have added Kenya and Namibia. Because the delegated regulation can only be rejected as a whole, all of the changes proposed by the Commission are therefore rejected. The Commission will now be required to present a new delegated regulation.
European Commission urges France, Ireland and Latvia to correctly transpose the AMLD5
The European Commission decided on Wednesday 24 April to open an infringement procedure against Ireland (INFR(2023)2188) and France (INFR(2024)2037), as well as to send a second letter of formal notice to Latvia (INFR(2023)2028) for having incorrectly transposed the 5th Anti-Money Laundering Directive. These Member States had notified a complete transposition of the amended Directive. Nevertheless, the Commission has identified several instances of incorrect transposition of the Directive into national law. This failure concerns, in the case of France, not ensuring the completeness of the national Beneficial Ownership register by not including in it certain legal entities. In the case of Ireland, the failure refers to the current system not guaranteeing the adequacy and completeness of the information held in the Beneficial Ownership register of trusts as well as regards the accessibility of its information. In the case of Latvia, incorrect transposition affects in particular the functioning of its Financial Intelligence Unit (FIU) by limiting its obligation to exchange information with other FIUs. Ireland, France and Latvia have now two months to respond and address the shortcomings raised by the Commission. In the absence of a satisfactory response, the Commission may decide to proceed with the next step of the infringement procedure and issue a reasoned opinion.
OECD issues a consolidated commentary on Pillar Two guidance
The OECD published on Thursday 25 April an updated commentary on the global anti-base-erosion (GLOBE) model rules and more illustrative examples under Pillar Two. The document consolidates the March 2022 GLOBE rule commentary with the successive guidance released in February 2023, July 2023, and December 2023. The OECD also released an updated document containing more illustrative examples of how the rules work when applied to different fact patterns. The OECD is reportedly working on a fourth round of administrative guidance, which is expected to be released before the second half of 2024. It is likely to include advice on several issues, including the cross-border allocation of current and deferred taxes.
OECD publishes its Taxing Wages 2024 report
Post-tax incomes fell in real terms in more than half of OECD countries, according to the Taxing Waging 2024 report published by the OECD on Thursday 25 April. Between 2022 and 2023, average wages rose in 37 OECD member countries in nominal terms but declined in real terms in 18 member countries, the report found. The fall in the real wage was greater than 2% in seven countries, including four EU countries: Estonia, the Czech Republic. Hungary and Sweden. In a majority of countries, the increase in labour taxation was primarily driven by increases in personal income tax. Despite the fall in real wages, nominal wages rose in 37 of the 38 countries, as inflation remained above historic levels. In the absence of automatic indexation of tax systems in many OECD countries, high inflation tends to increase workers’ tax liabilities by pushing them into higher tax brackets, the OECD said. This year’s edition of Taxing Wages includes a special feature that examines how the tax wedge differs between first and second earners. Specifically, the report analyses the tax rates on second earners in married couple. It found that, within married couples, second earners, 75% of whom are women in virtually all OECD countries, face higher effective tax rates than single workers when taking up employment at the same wage level in the majority of OECD countries, although the gap has narrowed in recent years.
IESBA to hold interactive webinars on its recently released global ethics standards on tax planning
The International Ethics Standards Board for Accountants (IESBA) announced on Thursday 25 April that it will hold two interactive global webinars in the coming weeks to present the first global ethics standards on tax planning, released earlier this month. The standards establish a comprehensive ethical framework to guide professional accountants when providing tax planning and related services. The framework stipulates the expected mindset and behaviours of professional accountants when they recommend or otherwise advise on tax planning arrangements to employing organizations or clients. The standards were developed in response to public interest concerns about tax avoidance and the role played by consultants in light of revelations in recent years such as the Paradise and Pandora Papers. Beyond just the accountancy profession, all other tax advisers are strongly encouraged to follow the standards. The 1.5-hour webinar in English will feature an overview of the standards and provide an opportunity for stakeholders to participate in a questions-and-answers session with the presenters. To follow the webinar on 13 May 2024 you can register here and for the webinar on 15 May you register here.
