EU Tax & Compliance Bulletin 57

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EU: Member States’ Digital Tax Not State Aid:

The Executive Vice-President of the European Commission Margrethe Vestager said the European Commission is strongly supportive of actions taken by some EU Member states to impose unilateral digital services tax in absence of a collective action. “I strongly applaud that Member states are picking it up where we failed as a community together to do something. It is very important in order to be able to answer the many businesses who pay their taxes, that you’re willing to do something to make sure that your competitors, they pay as well,” Vestager said.

European Court of Justice Revisits ‘Final Losses’ Doctrine in Case C405/18 AURES:

The Court of Justice revisited its ‘final losses’ doctrine in the Case C-405/18 Aures, by establishing that Member states are not required to take into account losses accrued by a taxpayer in its former jurisdiction of tax residency. By such conclusion, the Court upheld its National Grid Indus (C-371/10) conclusions, explaining that the freedom of establishment does not oblige Member State of transferred residence to take into account losses realised in another Member State, which definitely fall outside the scope of its taxing jurisdiction.

OECD Publishes Dispute Resolution Reports:

The OECD has released the latest edition of dispute resolution peer review reports (BEPS Action 14) for Brunei Darussalam, Curaçao, Guernsey, Isle of Man, Jersey, Monaco, San Marino and Serbia. The reports assess each country’s efforts to implement the BEPS Action 14 minimum standard, containing approximately 135 targeted recommendations that will be followed up in Stage 2 of the peer review process.

EU Commission Publishes Tax Evasion & Tax Simplification Roadmap (1):

The European Commission has published a Roadmap concerning its Action Plan to fight tax evasion and simplify taxation, as well as for its external strategy for taxation good governance. The Roadmap indicates that following a conference on the tax challenges in the digital era, scheduled to take place in April 2020, public consultations will take place concerning followup actions.

The Commission will publish the Action Plan together with its initial legislative proposals in June 2020.

EU Commission Publishes Tax Evasion & Tax Simplification Roadmap (2):

The Roadmap lists the following as steps to be taken concerning tax evasion: strengthening cooperation tools amongst tax administrations at Union level; introducing new digital solutions to move to real time sharing of information and improve data analytics; for taxation data to be provided directly to taxation authorities from digital platforms (concerning which a legislative proposal is specifically foreshadowed); and improved cross-border recovery and cooperation agreements.

The Commission will publish the Action Plan together with its initial legislative proposals in June 2020.

EU Commission Publishes Tax Evasion & Tax Simplification Roadmap (3):

In relation to simplifying taxation, the Roadmap details that the following actions may be taken: the introduction/improvement of mechanisms concerning cross-border taxatin disputes, the simplification and modernisation of VAT rules and procedures for withholding taxes in investment in the Single Market; the improvement of cooperative compliance; the introduction of IT solutions to levy taxation in real time; and the reinforcement of the EU position with third countries, particularly by way of the external strategy for taxation good governance, which may include defensive measures being introduced, technical assistance being offered or agreements being made with third countries.

The Commission will publish the Action Plan together with its initial legislative proposals in June 2020.

Portugal Ratifies OECD BEPS Multilateral Instrument:

Portugal has deposited its instrument of ratification to the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. The multilateral taxation treaty allows jurisdictions to update their existing double taxation treaties and transpose measures agreed in the BEPS project without further need for bilateral negotiations. It now extends to over 1,650 bilateral tax treaties.

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.