Tax Policy

June 2020

  • Member states give final green light to DAC 6 deferrals
  • European Parliament Plenary votes overwhelmingly for new tax Committee
  • OECD negotiations face new obstacle as US marches out of the room

European Parliament

Tax Committee set up supported by vast majority of MEPs

As reported in the previous Tax Policy Update, on 18 June the European Parliament Plenary approved the setting up of a permanent tax sub-Committee. The MEPs supported the motion by a vast majority of 613 in favour, 67 against and 8 abstentions.

European Parliament gives green light for DAC 6 deferral

On 19 June, the European Parliament Plenary approved its opinion on the Commission’s proposed DAC 6 deferral due to COVID. The Parliament’s resolution passed by 500 votes in favour, 152 votes against and 13 abstentions.

The European Parliament’s opinion contains a few changes to the Commission’s original proposal, but is non-binding and thus will not have an impact on the final outcome.

However, the Parliament’s opinion is still necessary before the proposal can become EU law, so with the vote MEPs paved the way for EU member states in the Council to approve the text (see article below).


Council calls for reviewing scope of EU ‘tax havens’ list by mid-2021

EU member states have approved Conclusions on progress achieved during the Croatian Presidency on tax files.

The Conclusions give a helpful summary of what has been discussed and progressed on in the past six months in particular on the EU list of non-cooperative jurisdictions. In the Conclusions, member states also call for a temporary halt in some of the screening exercises of third countries as part of the non-cooperative jurisdictions work flow. Moreover, they call for review and possibly expand the scope of the screening by mid-2021. Read more

Member states give final green light to DAC 6

On 24 June, EU member states gave their final approval for postponing by six months the DAC 6 obligations. This was made possible by the European Parliament adopting its non-binding opinion (see article above).

Depending on the evolution of the pandemic, the Council will have the option to extend the deferral period once for a maximum of three further months. Nevertheless, all relevant information will have to be reported to and exchanged by the tax authorities within the deferred deadlines.

An agreement on the VAT e-commerce deferrals is also expected in July, once the European Parliament has provided its non-binding opinion. Read more

Commission says excessive tax competition in the EU distorts Single Market

  • Question by MEP Oscar Lancini (ID/Italy)
  • Reply by Commissioner Gentiloni

Commission “warmly welcomes” European Parliament’s calls for CCCTB, DST, FTT, and green taxes as own resources

  • Question by MEP Bogdan Rzońca (ECR/Poland)
  • Reply by Commissioner Gentiloni

New blow to OECD negotiations as US walks out of the table

The US has proposed a halt from the OECD negotiations on international tax reforms, and withdrawn from talks with the EU on taxing the digital economy. The move comes soon after the US declared its intention to investigate several jurisdictions’ unilateral digital tax regimes.

This major setback to the negotiations puts in danger the negotiating partners’ aspirations to reach an agreement this year, although the OECD stated in response to the US move that work must continue with the view of a 2020 agreement.

French finance minister called the US move a “provocation”, whilst the EU reacted by re-iterating, through Commissioner Gentiloni, its intention to move ahead with unilateral digital tax reforms if OECD negotiations fail to deliver. Executive Vice-President Vestager, for her part, insisted that the EU would “really, really prefer a global consensus” but that if this is not possible, Europe will proceed alone “if we need to”.

ICRICT publishes report on COVID recovery and taxation

The Independent Commission for the reform of International Corporate Taxation (ICRICT) has published a new report with tax recommendations for post-COVID recovery.

The recommendations include higher tax rates in “oligopolised sectors”, a global minimum effective tax rate of 25% and public country by country reporting (CBCR). Read moreThis curated content was brought to you by Johan Barros, Accountancy Europe policy manager since 2015. You can send him tips by email, follow him on Twitter and connect with him on LinkedIn.