ETAF participates to the EU Tax Observatory annual conference
On Tuesday 30 May, ETAF Head of Office, Michael Schick, will participate to the annual conference of the EU Tax Observatory in Brussels. Entitled “Investing in the Future of Europe: Building the EU’s Own Resources”, the conference will be divided into three sessions. The morning session will discuss new forms of taxation in the EU, including the OECD Pillar I, BEFIT and Digital Service Taxes. Michael Schick will participate to the second session in the afternoon which will focus on how to effectively tackle tax avoidance. The panel is composed of MEP Paul Tang, Chair of the FISC subcommittee of the European Parliament, MEP Kira Peter-Hansen, Vice-Chair of the FISC subcommittee, Giulia Aliprandi, Researcher at the EU Tax Observatory, and will be moderated by Elodie Lamer, journalist for Tax Notes. The panel will touch upon the ongoing concerns related to the use of shell companies and to the role of enablers in fostering tax avoidance by both companies and individuals. Finally, the third session will discuss the potential and limitation of taxing the wealth of individuals.
MEPs start discussions on the ViDA package
On Thursday 25 May, the ECON committee of the European Parliament met to discuss the proposals of the VAT in the digital age package (ViDA). MEPs agreed with the need to close the loopholes and tackle the VAT fraud. The discussion however showed some divergent views with respect to the deadlines proposed by the Commission for the electronic invoicing. During the meeting, the rapporteur, MEP Olivier Chastel (Renew Europe, Belgium) called for postponing the deadline for entry into force by 1 year to give the companies and authorities time to adapt. He also said that the deadline for electronic invoicing should be extended to 10 working days instead of the 2 working days proposed by the Commission. The new date and IBAN requirements should either be deleted or adapted, he added. Other issues discussed included the role of the EPPO, ways to deal with the platform economy or the respect of privacy. The deadline for political groups to table amendments is 14 June and the vote in ECON is scheduled for October 2023.
MEPs and experts discuss how to control inflation through taxation
On Tuesday 23 May, the FISC subcommittee of the European Parliament held a public hearing on “the role of tax policy in controlling inflation and promoting sustainable growth in the context of economic recovery”. MEPs and experts discussed how tax policy can help to control inflation and to promote sustainable growth in the context of economic recovery in the EU and looked at possibilities for new rules of VAT rates, inflation adjustments of tax brackets and other tax measures, such as tax incentives in renewable energy, and taxes on environmentally harmful activities. In general, the speakers explained that taxation is not the best tool to deal with inflation, but it can be used to mitigate its negative impacts. Meanwhile, on the question of promoting sustainability, there was a general feeling that tax policy has a role to play in changing behaviour. In particular, Ricardo Martner, Commissioner of the Independent Commission for the Reform of International Corporate Taxation (ICRICT) explained that three measures can be taken globally to manage taxation in times of high debt and low growth: windfall taxes, digital taxation and wealth taxation.
MEPs start their reflexion on further reform of corpore taxation rules
MEP Isabel Benjumea Benjumea (EPP, Spain) recently published her draft initiative report on further reform of corporate taxation rules. In particular, she argues that the regulatory burden on European businesses should be immediately eased by enforcing a regulatory moratorium and assessing the impact of past actions on corporate taxation before suggesting new legislation. She also calls on the European Commission to carry out "competitiveness checks" for new legislative tax proposals. Ms Benjumea sees the move towards a simplified tax regime as the key for decreasing administrative burden on European businesses. To this end, she calls on the Commission to guide Member States towards a simplification of the refund procedures, deductions and litigation. While welcoming the Commission's upcoming BEFIT proposal, with companies shifting their focus towards the implementation of the OECD Pillar Two rules, the rapporteur urges the Commission to sequence the implementation of these regulatory packages so as to provide European businesses the necessary "breathing space" and time to prepare for the changing regulatory landscape. Finally, the rapporteur laments the Council decision to suspend the examination of the DEBRA proposal and calls on them to re-launch the negotiations. The vote of this draft report in the ECON committee is scheduled for September 2023.
IASB issues IAS 12 final amendments introducing a temporary relief from deferred tax accounting
The International Accounting Standards Board (IASB) issued on Tuesday 23 May its final amendments to IAS 12 Income Taxes, following stakeholders' concerns about the potential implications of the OECD Pillar Two model rules for the accounting for income tax in financial statements. The amendments will introduce a temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of the global tax rules; and targeted disclosure requirements for affected companies to help users of the financial statements better understand a company’s exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date. According to IASB, the amendments will ensure that affected companies apply IAS 12 consistently and that investors are given better information before and after any jurisdictional Pillar Two legislation comes into effect. Companies can benefit from the temporary exception immediately but are required to provide the disclosures to investors for annual reporting periods beginning on or after 1 January 2023, the IASB said. A future maintenance project has been added to the pipeline in which the temporary exception and related disclosures will be revisited, it added.
OECD releases training modules on the Two-Pillar solution
The OECD has recently released a series of recorded webinars and video capsules covering different fundamentals aspects of the Two-Pillar solution which aims to reform international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate. On Pillar One, the training modules cover, among other things, the essential aspects of the draft model rules for nexus and revenue sourcing, the elimination of double taxation, administration and tax certainty aspects. The OECD has also released a series of webinars on the 5 steps to apply the key provisions of the GloBE rules. The full list of videos can be found here.
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.