Weekly Tax News - Monday 31 July 2023

July 31, 2023

FASTER public consultation deadline extended until 18 September 2023

The deadline to give a feedback to the European Commission on its new framework for “Faster and Safer Relief of Excess Withholding Taxes” (FASTER) has been extended until 18 September 2023. With this initiative, the Commission wants to reduce the length and the administrative burden usually linked to these kind of refund procedures and, at the same time, reduce the risks they sometimes present in terms of tax abuse. It will mainly involve Member States’ tax administrations, investors and financial intermediaries (e.g. banks). The Commission is, among other things, proposing that Member States could choose between a relief-at-source system and a quick refund system in 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. To benefit from these two fast-track procedures, investors will need to contract with “certified financial intermediaries” that are included in a national register that Member States will have to set up. Member States will also be able to rely on a common EU digital tax residence certificate to confirm the EU taxpayers’ tax residency. The directive, if adopted, should come into force on 1 January 2027. The text is now available in all EU languages here.

EU Tax Symposium announced for 24-25 October 2023

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. Registration will open in September.

European Commission is looking for contractors to assess tax legislation compliance

The Directorate General for Taxation and Customs Union (DG TAXUD) of the European Commission recently published a call for tenders to provide legal studies that will assess how EU tax policy is transposed and applied in Member States. DG TAXUD is reportedly looking for contractors to help facilitate studies to support evaluations and impact assessments to implement the Better Regulation principles of delivering efficient and effective policies and laws. Among other things, the contractor would have to list the national laws, regulations, and administrative arrangements aimed at transposing or implementing EU rules in a given Member State. Compliance studies would apply to areas such as VAT; administrative cooperation, mutual assistance, and exchange of information; and tax dispute resolution, excise duties, and direct taxation. The call for tenders will run through 25 September.

FISC mission to Singapore

From 25 to 27 July, a delegation of 4 MEPs of the FISC subcommittee of the European Parliament, headed by the Chair MEP Paul Tang, travelled to Singapore to discuss developments in the area of international taxation and the fight against tax avoidance and evasion. The delegation met with the Senior Minister of State for Finance and Acting Minister for Transport, the Chair of the Public Accounts Committee, the Chair of the Finance and Trade and Industry Committee and other Members of the Singapore Parliament. Meetings with the Chief Executives of the Accounting and Corporate Regulatory Authority (ACRA) and Inland Revenue Authority (IRA) as well as with stakeholders from professional associations and academia also took place. The discussions focused on the implementation of the OECD/G20 Inclusive Framework agreement on an international tax reform and Singapore's efforts to combat tax evasion and avoidance. At the end of the mission, MEP Paul Tang said in a statement that “Singapore should not limit itself to applying minimum standards. It should be a first mover when it comes to applying OECD recommendations, such as interest deduction limitation rules or hybrid mismatches”. The attractiveness of Singapore for MNEs or very rich individuals was also discussed, together with Singapore's readiness to implement or improve standards on good tax governance.

2023 State of Tax Justice report published

On Tuesday 25 July, the Tax Justice Network published its annual State of Tax Justice report. The 2023 edition shows that countries are losing $472 billion in tax a year to global tax abuse. Of the $472 billion lost a year, $301 billion is lost to cross-border corporate tax abuse by multinational corporations and $171 billion is lost to offshore tax abuse by wealthy individuals. Lower income countries continue to be hit harder by global tax abuse, the report states. While most annual tax losses are suffered by higher income countries ($426 billion), these losses are equivalent to 9 per cent of higher income countries public health budgets. Lower incomes countries’ tax losses ($46 billion) are equivalent to more than half (56 per cent) of their public health budgets. If countries stay the course followed for the past 10 years on international tax rules, countries will lose $4.7 trillion over the next 10 years, the report estimates. To avert these tax losses, the Tax Justice Network urges countries to support moving leadership on global tax from the OECD to the UN, which would provide, in its view, a more viable forum for securing effective tax solutions.

OECD supports West African States in strengthening the fight against BEPS and improving tax transparency

As part of the European Union's Fiscal Transition Support Programme in West Africa (FTSP), the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) announced on Wednesday 26 July that they have collaborated with the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA) commissions in the development of three community legal tax instruments intended to strengthen the fight against base erosion and profit shifting (BEPS) and improve tax transparency in West Africa. These legal instruments, which are aligned with the most recent international tax standards,  include: - a Directive on the harmonisation of transfer pricing rules which gives the means to the tax administrations of ECOWAS Member States to better control multinational enterprises present on their territory; - a Directive on beneficial ownership which allows the identification of the beneficial owners of legal persons and arrangements, and ensures the availability of adequate, accurate and up-to-date information on these beneficial owners; and - a Supplementary Act on mutual administrative assistance in tax matters which offers multiple forms of co-operation between the tax administrations of ECOWAS Member States and thus strengthens the exchange of information. They were all adopted by the ECOWAS Council of Ministers and the Conference of Heads of State and Government of ECOWAS at their respective meetings on 6-7 July 2023 and 9 July 2023 in Bissau.

The next Weekly Tax News will be dated Monday 4 September. ETAF wishes you a nice summer break!

ETAF is a registered organisation in the EU Transparency Register, with the register identification number 760084520382-92.

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