EU DAC6, Tax and Compliance Bulletin 64

Printable Version

DAC6 Optional Deferral Enters Into Force

The proposal as agreed by Member States in early June to defer deadlines for exchange of information under the administrative cooperation directive (DAC6) as a result of the coronavirus crisis has now been published in the Official Journal of the European Union and has entered into force.

The Directive provides the option for Members States to postpone deadlines imposed by the EU Directive on Administrative Cooperation (DAC6) for reporting of relevant cross-border arrangements by 6 months. The Directive also provides that the Council can agree to extend the deadlines in the Directive by a further 3 months, if required by the circumstances surrounding the coronavirus.

The Directive allows Member States to defer deadlines arising out of the Directive as follows:

  • Defer time limit for exchange of information on Reportable Financial Accounts from 30/09/2020 to 31/12/20 (note: DAC2 – CRS);
  • Defer date for 1st exchange of DAC6 information from 31/10/20 to 30/04/21;
  • Defer date for beginning of 30 days period for reporting cross-border arrangements from 01/07/20 to 01/01/21;
  • Defer date for reporting ‘historical’ arrangements (that became reportable from 25/06/18 to 30/06/20) from 31/08/20 to 28/02/21.

Certain Member States have already proceeded to introduce legislation transposing the extension to the DAC6 reporting deadline into domestic law.

EU Commission Publishes Brexit VAT Update

The European Commission has published an updated Notice to Stakeholders concerning the EU rules applicable to services in light of the UK withdrawal from the EU.

The Notice confirms that during the transition period the UK continues to be subject to the EU VAT Directive in respect of transactions for services made during this period. Thereafter, the Notice sets out that for supplies of services, suppliers from the UK will need to register under the mini-one-stop-shop as a supplier in the relevant Member States. Additionally, requests for cross-border VAT refunds between the UK and Member States will be subject to the 13th VAT Directive following the transition period.

A EU-UK statement on this matter confirms that the UK will not entertain an extension of the transition period, and states that significant progress still needs to be made to agree an exit deal. It indicates that negotiations will be intensified in the coming months.

ECOFIN Report to EU Council on Tax Issues Approved

The EU Council has now approved the report prepared by the ECOFIN Council providing an overview of the progress on tax policy work achieved under the Croatian Presidency of the EU.

The report highlights in particular the agreement reached on the legislative package on mandatory transmission and exchange of VAT relevant payment information, the adoption of the directive on the common system of value added tax as regards the special scheme for small enterprises, the conclusions on the future evolution of administrative cooperation in the field of taxation in the EU and the negotiations on amending the administrative cooperation directive to defer deadlines for exchange of information as a result of the coronavirus crisis.

The report also contains a detailed update concerning other significant tax files, such as CCTB, the EU digital taxation package and the EU position on international negotiations and progress on the VAT Action Plan.

EU Prolongs State Aid Framework

The European Commission has prolonged the application of State Aid rules which were set to expire at the end of 2020, in order to minimise the economic impact of the COVID-19 outbreak on companies. Many of the rules have been prolonged by one year, in order for the Commission to carry out fitness checks and evaluate how the State Aid Rules can best be adapted to fit with the priorities set in the European Green Deal and European Industrial Strategy.

EU Commission July Infringement Package

The European Commission has published its July infringement package setting out the legal action being pursued against various Member States by the Commission for noncompliance with obligations under EU law.

Following on from its Anti-Money Laundering Action Plan published in May, the Commission has identified Member States who have yet to fully implement the 4th and 5th Anti-Money Laundering Directives (AML). Belgium, Austria and the Netherlands were referred to the Court of Justice for failing to implement the 4th AML Directive. Letters of formal notice were sent to Luxembourg, Slovakia and Slovenia for failing to properly implement the 4th AML. The countries will have two months to notify the Commission that the Directive has been implemented, or will thereafter be issued with reasoned opinions. Czechia, Denmark and Italy were issued with reasoned opinions for failing to fully implement the 4th AML Directive. If they have not responded within three months, the Commission will refer them to the Court of Justice.

Bulgaria, Ireland and France were also issued with letters of formal notice for failing to connect their national business registers to the EU business registers tool. The countries have two months to respond, before being issued with a reasoned decision.

The Commission has also issued Belgium with a letter of formal notice for failing to correctly transpose the Anti-Tax Avoidance Directive, in relation to interest limitation rules and double taxation arising from CFC rules. Belgium has three months to respond, or will otherwise be issued with a reasoned opinion.

Platform for Collaboration on Tax Invite Input on Draft Tax Treaty Negotiation Toolkit

The Platform for Collaboration on Tax, a joint initiative of the IMF, OECD, UN and World Bank Group, has issued a draft toolkit on tax treaty negotiations for developing countries in order to further capacity-building support. Input on the toolkit can be submitted until 10 September 2020.

The Toolkit builds on the UN’s Manual for the Negotiation of Bilateral Tax Treaties between Developed and Developing Countries and built specifically on the guidance on conducting tax treaty negotiations. The Toolkit seeks input in particular concerning whether all relevant technical and practical considerations and capacity building skills for developing countries in treaty negotiations have been covered by the draft Toolkit, and input on any resources and tools that should be included in the toolkit.

Input can be submitted until 10 September 2020 via e-mail at <taxcollaborationplatform@worldbank.org>

 

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.