SAFE proposal expected in April 2023
The European Commission reportedly plans to unveil its proposal for a Directive to tackle the role of enablers that facilitate tax evasion and aggressive tax planning (Securing the Activity Framework for Enablers – SAFE) on 5 April. Work on this initiative started in October 2022 with a public consultation but the content of the future proposal still remains unclear. In its public consultation document, the Commission considered several options, including due diligence procedures to perform a self-assessment test to demonstrate that a tax scheme does not lead to tax evasion or aggressive tax planning, a code of conduct that would prohibit the enablers who design or assist in the creation of tax evasion and aggressive tax planning schemes and an EU register of enablers. The initiative would reportedly be part of a tax package that also includes a proposal for a common system for the avoidance of double taxation and prevention of tax abuse in the area of withholding taxes.
DAC8 could be used to correct DAC6 intermediary reporting requirement
The EU could use the eighth directive on administrative cooperation (DAC8), presented by the Commission beginning of December, to address the recent decision of the Court of Justice of the European Union invalidating DAC6 reporting requirement that infringes professional privilege. EU Council lawyers would have reportedly advised Member States to use the DAC8 opportunity to bring EU rules in conformity with the judgment of the Court. The issue, according to the Court, is that the provision of DAC6 requiring lawyers acting as intermediaries in cross-border tax planning arrangements to notify other intermediaries of their reporting obligation contravenes legal professional privilege. DAC8 is a priority for the Swedish presidency of the Council of the EU, who wants to reach an agreement before the end of its mandate.
OECD unveils implementation guidance on Pillar Two
The OECD unveiled at the end of December 2022 an implementation package for Pillar Two (so-called ‘GloBE rules’) introducing a minimum 15% effective tax rate for large multinational enterprises (MNEs). The package includes a guidance on safe harbours and a common understanding concerning the transitional penalty relief regime. The OECD also published a public consultation document seeking inputs on the amount and type of information that MNE Groups should be expected to collect, retain and/or report for the application of the GloBE rules and possible simplifications that could be incorporated in the GloBE Information Return. Moreover, the OECD issued a public consultation document outlining various mechanisms for achieving tax certainty under the GloBE rules, including dispute prevention and dispute resolution mechanisms. Interested parties have until 3 February 2023 to submit their comments on the two public consultation documents. The OECD expects to release a first package of “administrative guidance” in early 2023.
France's Gaël Perraud elected new Chair of the OECD Committee on Fiscal Affairs
Mr Gaël Perraud, Director of European and International Taxation at the Tax Policy Department of the French Ministry of Economy, has been elected Chair of the OECD's Committee on Fiscal Affairs (CFA) as of 1 January 2023, the OECD announced on Thursday 5 January. He replaces Ms. Fabrizia Lapecorella, who resigned in December 2022 following her departure from the Italian Ministry of Finance. As Chair of the CFA, he will serve as Co-Chair of the OECD/G20 Inclusive Framework on BEPS, alongside Marlene Nembhard-Parker of Jamaica, who became co-Chair in March 2022. Mr. Perraud has served as France’s Director of European and International Taxation since 2018. He is responsible for international taxation matters for France, including bilateral issues such as treaty negotiations, as well as representing France in multilateral organisations. Prior to his designation as Chair of the CFA, he has served in a number of leadership roles in the OECD.
Five jurisdictions to join the EU AML blacklist
At the end of December 2022, the European Commission reportedly suggested adding five jurisdictions to the EU list of high-risk third country jurisdictions in terms of combating money laundering and terrorist financing: the Democratic Republic of the Congo, Gibraltar, Mozambique, Tanzania and the United Arab Emirates. Nicaragua, Pakistan and Zimbabwe have been removed from the list as they no longer present strategic deficiencies that pose a significant threat to the EU financial system. In accordance with the fourth anti-money laundering directive, the Commission is required to update this list regularly, taking into account the information provided by the Financial Action Task Force (FATF). European financial institutions are required to apply heightened vigilance to transactions involving high-risk third country jurisdictions. The European Parliament and the Council of the EU have one month to agree on the draft delegated regulation.
Disclaimer
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.
