Tax Policy

June 2022

  • European Parliament adopts position on minimum taxation
  • No Council agreement on minimum tax Directive in May; finance ministers to reassess in June
  • OECD secretary-general says Pillar 1 progress potentially delayed into 2023

European Commission

Commission publishes May infringements package

As always, the infringements package includes several tax cases. For example, the European Commission (EC) requests Germany to bring its tax rules on voluntary pension savings contracts (“Riester-Rente” contracts) concluded after 1 January 2010 in line with EU law. Moreover, the EC has decided to refer Malta to the Court of Justice of the EU over its legislation on annual circulation tax. Read more

Russian sanctions: EC includes tax crimes in list of offenses justifying confiscation of assets

The EC proposed on 25 May a new Directive on Asset Recovery and Confiscation. The proposal provides a new comprehensive set of rules that addresses asset recovery from beginning to end – from tracing and identification, through freezing and management, to confiscation and final disposal of assets.

The proposal reinforces situations where assets can be confiscated without a conviction. Moreover, it enables the confiscation of unexplained wealth linked to criminal activities to make sure that no illegal assets remain in the hands of criminals when they have been able to cover their tracks and hide the illegal origin of their properties.

The Directive’s scope includes tax crimes relating to both direct and indirect taxes. Read more

European Parliament

European Parliament Plenary approves position on minimum taxation

The European Parliament’s (EP) Plenary adopted on 19 May its opinion on the global minimum tax rate Directive. The report, prepared by MEP Aurore Lalucq (S&D/France), passed by 503 votes in favour, 46 against and 48 abstentions. Although several MEPs criticized the draft opinion as well as the Organization for Economic Co-operation and Development (OECD) agreement for lack of ambition, the opinion finally adopted by the Parliament remains broadly close to it.

With the EP opinion now finalised, it is up to EU Member States to find agreement. For more details on the dynamics in the Council, see article further below. Read more

EP publishes draft position on Unshell Directive

The draft report was prepared by MEP Lidia Pereira (EPP/Portugal), and is the first step towards the EP’s opinion on the EC’s Shell entities Directive published on 21 December 2021.

The draft report makes, notably, the following changes to the original Directive:

  • reinforcing clarity on the obligations for reporting undertakings, and ensuring that the concrete situation of small and medium-sized enterprises (SMEs) and digital start-ups having minimal economic substance is safeguarded
  • providing further clarity on the minimum substance criteria for tax purposes
  • taking a strict stance on the tax consequences on shell companies not having a minimum substance

A Committee on Economic and Monetary Affairs (ECON) vote on Ms. Pereira’s draft report is currently scheduled for 17 November.


France eyes minimum tax deal in June, some diplomats raise optimism

Following the Council’s failure to find agreement on the Pillar 2 Directive at the 5 April Economic and Financial Affairs Council (ECOFIN) meeting, the French Presidency intended to bring it back to the finance ministers’ agenda for the 24 May ECOFIN. However, Poland maintained its veto on the proposal, and therefore the agenda item was cancelled at last moment. Instead, the Directive will now appear on the agenda of the 17 June ECOFIN.

At the time of writing, all bets are open as to whether the finance ministers will succeed. All depends on whether Poland finally lifts its veto – as several EU diplomats are now expecting – and any other countries raise unexpected objections to the Directive.

With the European Parliament’s opinion now finalised (see article above), Council adoption would be the final step for the minimum tax Directive to become EU law.

NFTs fall under gaze of global tax enforcement team

A group of tax enforcers from Australia, Canada, the Netherlands, the UK and US are examining how illicit financiers and tax dodgers are using “non-fungible tokens” (NFTs) to move money around, Politico reports.

Representatives from the five countries, dubbed the J5, announced their plans on 13 May after a week-long summit in London amid concerns that criminals are using crypto assets as a new means of subterfuge. Non-fungible tokens, or NFTs, are virtual collectibles in the form of art, songs or pieces of code that can be bought and sold online. Read more

‘Historic’ global tax deal on multinationals delayed until 2024

An international deal that would force the world’s biggest multinational companies to pay a “fair share” of tax has been delayed until 2024 amid fresh wrangling over the painstakingly negotiated agreement.

Mathias Cormann, the secretary-general of the OECD, told the World Economic Forum in Davos, Switzerland, that there were “difficult discussions” taking place that meant the deal could not come into force in 2023, as previously hoped. 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.