EU Council, Tax & Compliance Bulletin 67

Printable Version
AML CFT, Company taxation, EU, VAT (Value Added Tax), European Union Commission, double taxation, roadmap, transfer pricing, business taxation-CFE, OECD Pillar 1

Calls for Increased Transparency in EU Council Code of Conduct Business Taxation Group

The EU Council’s Code of Conduct Group is facing increasing criticism in the wake of the Apple judgment to increase transparency concerning its operations, and information on the application of its standards in the listing process for the EU tax “Blacklist”.

The Commission’s recent Communication on Tax Good Governance delivered as part of its 2020 Tax Package discusses means to improve the EU’s role in promoting tax good governance and tax transparency, which it aims to achieve by reforming the EU Council Code of Conduct on Business Taxation and making improvements to strengthen the EU’s List of Non-Cooperative Jurisdictions for Tax Purposes. Additionally, the Commission aims to expand the mandate of the EU Council Code of Conduct Group to examine conditions leading to unfair tax competition and aggressive tax planning within the European Union, such as tax residency rules allowing for double non-taxation, tax exemptions without appropriate safeguards and special citizenship schemes. It also plans to introduce the parameter of minimum effective taxation.

The most recent European Parliament committee, the TAX3 Committee, tasked with investigating financial crimes, tax evasion and tax avoidance, concluded in its report adopted by the European Parliament in March 2019 that there was a lack of political will in EU Member states to address tax evasion, tax avoidance and financial crime.

EU: Further Steps to Contend the COVID-19 Economic Impact

German Chancellor Angela Merkel as Chair of EU Presidency, President of the EU Commission Ursula von der Leyen and President of the European Parliament David Sassoli discussed next steps in the adoption of the EU’s recovery package “Next Generation EU” as well as the Multiannual Financial Framework, following the agreement reached by leaders of the EU Member states and the EU Parliament resolution of 23 July. The EU leaders and Mrs Merkel agreed that all procedures must be completed in order for the recovery package to become available on 1 January 2021.

OECD’s Global Forum Toolkit on the Mutual Assistance Convention

The OECD Secretariat has published a toolkit to facilitate countries’ decisions concerning becoming a party to the Mutual Administrative Assistance Convention and to provide guidance on the steps to be taken and how to better prepare for joining. The OECD hopes that strengthening the administrative cooperation framework by facilitating exchange of financial information (EOI) between countries will lead to increased tax transparency, combating tax evasion and helping domestic revenue mobilisation. The Convention on Mutual Administrative Assistance in Tax Matters was developed by the OECD and the Council of Europe in 1988 and amended in 2010, as the most comprehensive multilateral instrument to facilitate tax co-operation and to address tax evasion and avoidance.

Taxation to Dominate Upcoming EU Agenda

Taxation is reportedly set to dominate the EU agenda in the fall this year, with a letter from the German Finance Minister Olaf Scholz sent to colleagues setting out that “Our primary task will be to implement the recovery package” and to “focus on achieving an effective minimum tax on multinational companies”. The European Commission published its Tax Package for “fair and simple taxation” in July, comprised of a 25-step plan, a proposal for a EU Council Directive to revise the Directive on Administrative Cooperation to extend EU exchange of information rules to information on income generated by sellers on digital platforms, and a new external tax strategy by way of a Communication on Tax Good Governance in the EU & Beyond.

UN Committee of Experts Consider Digital Services Tax Treaty Provision

The UN Committee of Experts on International Cooperation on Tax Matters has published session papers ahead of their 21th Session meeting, to be held virtually between 20 October and 6 November 2020.In particular, the Committee of Experts will consider a draft treaty provision concerning tax on digital services, intended to be inserted into the UN Model Tax Convention.

UK Reportedly Set to Abandon Digital Tax

The UK Treasury is reportedly planning to abandon the digital services tax which was introduced this year in order to further trade negotiations for a post-Brexit free trade agreement with the United States.

The UK’s digital tax applies to businesses making search engines, social media platforms or online marketplaces available to UK users, including any associated online advertising of that business, which have a global annual turnover over £500 million pounds and over £25 million pounds of turnover attributable to revenue derived from UK users. The tax will apply at a rate of 2% to revenue over £25 million pounds.


Source: Malta Institute of Taxation Click here and CFE Tax Advisors Europe Click Here

Please contact David Marinelli should you wish to discuss any matter relating to your Malta registered company.