Discover below the key tax-related commitments made by various Commissioner nominees during their hearings
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Between 4 and 12 November, Commissioner nominees with portfolios assigned by President Von der Leyen attended hearings of relevant European Parliament (EP) Committees. The Members of the EP (MEPs) quizzed the nominees about their intentions and plans for the 2024-2029 term. For taxation, key points emerged from Wopke Hoekstra (Netherlands), Commissioner nominee for taxation, climate, net zero and clean growth:
The EC published on 29 October a report on the functioning of the EU’s Dispute Resolution Mechanism (DRM) Directive. The report details the DRM Directive’s three-step process for resolving tax disputes between Member States: complaint, mutual agreement procedure (MAP), and dispute resolution. It also provides an overview of the transposition checks conducted and statistical data collected under the DRM Directive, indicating that the directive has been effectively transposed, and that Member States are closing most cases within the required timeframes. While there is still limited experience with the directive’s application, preliminary feedback is positive, suggesting the DRM Directive is contributing to a fairer tax environment within the European Union.
The web portal was launched on 12 November to support the new VAT regime for SMEs, which becomes applicable from 1 January 2025 onward. The web portal contains valuable information for SMEs – and their advisors – on what the new rules will be, to whom they are applicable, frequently asked questions and much more.
In addition to Commissioner nominee Hoekstra (see feature article above), other nominees made tax related commitments in their EP hearings.
Maria Luís Albuquerque (Portugal), Commissioner nominee for Financial Services and the Savings and Investments Union, said the following:
Piotr Serafin (Poland), Commissioner nominee for Budget, Anti-Fraud and Public Administration, explained the following:
The EC decided on 14 November to refer Germany to the Court of Justice of the European Union (CJEU) for having failed to remedy the infringement of the free movement of capital due to its discriminatory tax treatment of reinvested capital gains upon sale of real estate located in Germany.
Germany grants a deferral of taxation for reinvested capital gains made on the sale of real estate located in Germany provided that the real estate has been attributed to the fixed assets of a domestic permanent establishment for an uninterrupted period of at least 6 years. Corporations established in Germany, even without a business activity therein, are deemed to have such a permanent establishment at their place of management (i.e. in Germany). Comparable corporations established in other EU/EEA Member States are deemed not to have such permanent establishments in Germany. Hence, they are denied such tax deferral on reinvested capital gains from the alienation of German real estate.
In a Plenary vote on 14 November, the EP adopted its opinion on the Council’s final agreement on withholding taxation (FASTER). The EP used the so-called fast-track procedure, meaning that no amendments were tabled. Now that EP’s opinion has been finalised, the Council’s FASTER agreement can be published in the EU’s Official Journal, thereby becoming EU law.
The agreement on ViDA was reached during the ECOFIN meeting of finance ministers on 5 November, following months of deadlock primarily due to Estonia’s objections over the deemed supplier rules.
In summary, ViDA introduces the following key changes:
On the deemed supplier rules specifically, a compromise was reached by granting Member States greater flexibility, notably by expanding the definition of short-term accommodation rental for tax purposes and giving Member States the possibility to exempt SMEs from the deemed supplier rules. The Council also agreed on a short transition period for applying these rules.