I hope everyone is well and safe in these complicated times!
First and foremost, I would like to thank you for your continuing interest in Accountancy Europe’s Tax Policy Updates, which strive to be the must-read one-stop-shop for all your relevant EU tax news.
You have got used to receiving these updates in your inboxes every two weeks, but starting now the Tax Policy Updates will appear once a month only. But fear not, the scope, range and ambition of the updates will not change! They will continue to provide a comprehensive monthly overview of all EU tax developments that you need to be aware of for your work (or private capacity interest).
Wishing you all a great autumn!
With kindest regards,
On 29 September, the Commission published a roadmap on its planned initiative to turn the VAT committee into a ‘comitology committee’ – enabling the Commission to adopt implementing rules on certain well-defined aspects of VAT, if the VAT committee approves.
The EU’s VAT committee – comprising representatives from national authorities and the Commission – aims to ensure EU rules on VAT are applied consistently across the bloc. However, it currently has ‘advisory’ status only.
This initiative was announced in the Commission’s 15 July tax package. Stakeholders can provide feedback to the Roadmap until 29 October. A Directive to make the initiative a reality is scheduled for fourth quarter of 2020. Read more
On 30 September, the Commission published Explanatory Notes on the new VAT e-commerce rules. They contain extensive explanations and clarifications on these new rules including practical examples on how to apply the rules if you are a supplier or an electronic interface (e.g. marketplace, platform) involved in e-commerce transactions.
These explanatory notes are meant to help online businesses and in particular SMEs to understand their VAT obligations arising from cross-border supplies to consumers in the EU. Read more
The European Commission will publish imminently a roadmap to amend the Directive on administrative cooperation on tax (DAC) to include within its scope alternative means of payment and investment (e.g. crypto-assets, e-money). The Commission fears that they may threaten to undermine progress made on tax transparency and pose substantial risks for tax evasion.
Stakeholders will be able to provide feedback on the Roadmap. A formal public consultation is scheduled for first quarter of 2021, and a legislative proposal in third quarter of 2021. Read more
European Commission roadmaps should also be imminently expected for its two initiatives on taxpayers’ rights.
The first one of these initiatives is a legally non-binding Communication that will analyse taxpayers’ rights in the EU Single Market, focusing on the rights of individuals, the self-employed and micro-enterprises. The Communication is scheduled for third quarter of 2021.
The second one is a soft law recommendation that will aim to facilitate tax compliance, encourage Member States to improve the relationship between tax administrations and taxpayers, ensure greater transparency and develop a service-oriented, digital-first approach. To this end, the Commission will identify and promote good administrative practices and enhance a better coordination of relevant national legislations in which taxpayers’ rights are embedded. A public consultation will be launched in the fourth quarter of 2020, and the recommendation published on the third quarter of 2021.
On 2 October, MEP Mairead McGuinness appeared before the ECON Committee of the European Parliament following her nomination as the Commissioner in charge of financial affairs (DG FISMA). The following week on 7 October, European Parliament approved her appointment.
The ECON hearing – and McGuinness’ DG FISMA portfolio – related mainly to financial services, but she was grilled on a few tax points too. For example, McGuinness was criticised for her Irish background, and some MEPs doubted whether she would support an EU tax harmonisation agenda. In response, McGuinness stated that she will leave her national hat behind and as Commissioner support tax cooperation. She underlined, for example, the fight for sustainable and fair taxation, and the need for the Commission to address the current onerous withholding tax framework in Europe that may disincentivise cross-border investment. She also declared her support for public CBCR and the financial transaction tax (FTT).
The European Parliament’s ECON Committee’s draft opinion on the EU’s future carbon border adjustment mechanism (CBAM, or tax), has been published. It has been prepared by the MEP Luis Garicano (RE/Spain).
Although legally non-binding, the draft opinion includes practical recommendations for how CBAM could work. For example, Mr. Garicano proposes that the CBAM be implemented as an extension of the EU emissions trading system (EU ETS). Moreover, he recommends that a design be introduced that measures the carbon content of imports through their basic materials composition. Read more
On 6 October, EU finance ministers amended the EU’s list of non-cooperative jurisdictions for tax purposes. In these latest amendments, Anguilla and Barbados were added to the list, whilst Cayman Islands and Oman were removed. The removal of Cayman Islands in particular has triggered criticism since the move. The EU list now has 12 third jurisdictions on it. Read more
On 12 October, the OECD will provide an update on the state of progress on the ongoing international tax reform negotiations. The update will be given through a public webinar that will feature a 45 minute presentation and a 10-15 minute Q&A. Read more
French Minister of Finance Bruno Le Maire presented the 2021 Finance Bill to parliament on September 28, 2020, which includes provisions to reduced taxes on production and plans to reduce the corporate tax rate next year.
A statement released alongside the Finance Bill confirmed the Government’s plans to lower the rate of corporate tax to 25% by 2022. It said the rate will drop to 27.5% for large companies and to 26.5% for companies with a turnover of less than EUR 250 million from 2021. The reduced rate of 15% is to be maintained for SMEs. 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.