European Union Commission Tax & Compliance Bulletin 73

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

European Union Commission Proposes to Extend Temporary State Aid Framework

The EU Commission has launched a consultation with Member States on extending the duration and scope of the Temporary State Aid Framework, adopted in March to assist Member States in dealing with the economic impact of the COVID-19 outbreak and prolonged in October 2020 to apply until 30 June 2021. The Framework allows Member States to provide aid by: providing grants, selective tax advantages and advance payments; providing State guarantees for loans taken by businesses; subsidising public loans to companies, putting in place safeguards for banks providing State aid to the economy; and providing short-term export credit insurance.

The Commission is proposing to extend the Framework to apply until 31 December 2021, to increase the amounts of aid that can be granted to companies and to enable Member States at a later stage to convert repayable loans provided into grants.

The EU-UK Trade and Cooperation Agreement

The EU-UK Trade and Cooperation Agreement concluded between the EU and the UK sets out preferential arrangements in areas such as trade in goods and in services, digital trade, intellectual property, public procurement, aviation and road transport, energy, fisheries, social security coordination, law enforcement and judicial cooperation in criminal matters, thematic cooperation and participation in Union programmes. It is underpinned by provisions ensuring a level playing field and respect for fundamental rights.

Malta DAC6 Reporting Deadline update

The Office of the Commissioner for Revenue has announced an update to the upcoming reporting deadlines:-

Cross-border arrangements where the trigger point for reporting took place between 1 July 2020 and 31 December 2020 to be reported by Monday 1 February 2021.

Reportable cross-border arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 to be reported by Monday 1 March 2021.

OpenLux: Tax Investigation into Luxembourg by Le Monde

Le Monde has today revealed it has completed an extensive investigation into tax affairs in Luxembourg, which will be published in 5 chapters, concerning: transparency and beneficial ownership, French individuals, French families of great wealth, multinationals; and money laundering.

Le Monde reportedly compiled information from beneficial owner databases for the 124,000 companies registered in Luxembourg, revealing that their analysis shows “55,000 offshore companies managing assets worth at least 6 trillion euros”, with 90% of the beneficial owners of the companies reportedly controlled by non-Luxembourgish entities, from over 157 jurisdictions, with over 10,000 of these controlled by French entities. The report details that Luxembourg is home to over “279 of the more than 2,000 billionaires listed by Forbes magazine and 37 of the 50 wealthiest French families”. The investigation was carried out jointly by Suddeutsche Zeitung in Germany, Le Soir in Belgium, McClatchy in the United States, Woxx in Luxembourg, IrpiMedia in Italy, and the OCCRP Consortium of investigative journalists.

European Union Commission Launches Consultation on VAT Rules for Financial & Insurance Services

The EU Commission has launched a public consultation concerning VAT rules for financial and insurance services. The initiative to review the VAT rules for financial and insurance services was contained in the Commission’s 2020 Tax Package Action Plan, based on the fact the existing rules have been criticised for being complex and difficult to apply, leading to uncertainty, high compliance costs and lack of VAT neutrality. An impact assessment is also being prepared on the implications of either removing the existing exemption or keeping it and modifying the scope, as well as concerning issues caused by the current exemption such as cost-sharing and issues with calculating VAT on high-frequency trading.

European Union Commission Publishes Mind the VAT Gap Roadmap

The EU Commission has published a Roadmap concerning a planned Communication entitled “Mind the VAT Gap” which will highlight administrative practices in Member States which have reduced their national VAT gap. The Communication will also identify financing or other tools the Commission can provide in order for Member States to implement the practices identified in the Communication. The initiative was contained in the Commission’s 2020 Tax Package Action Plan and will build on the statistical information contained in the most recent VAT Gap study.

European Union Commission Launches Consultation on State Aid Enforcement

The European Commission has launched a public consultation concerning enforcement of the State aid rules by Member states and national courts. The Commission initiated State Aid Modernisation programme, which allowed EU Member States to grant State aid in more cases where no prior authorisation by the Commission is required. The public consultation builds on a study that has identified lack of awarded remedies to parties by national courts.

The Draft Notice on enforcement of State aid rules provides details procedural aspects of the EU State aid regime, with specific focus on guidance to national courts when they apply these rules and encourages closer cooperation with the European Commission.

Council to Discuss Financial Transactions Tax

The Working Party on Taxation (Indirect Tax) of the Council of the European Union will discuss on 24 February the proposal for a Council Directive implementing enhanced cooperation in the area of financial transaction tax (FTT). The Portuguese Presidency of the EU will progress this file which has been stalled at EU level for quite some time.

A Franco-German attempt to reconcile the positions of Member states participating in the FTT enhanced cooperation procedure back in 2019 (Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain) resulted in a draft-compromise model, whereby generated revenue should be distributed by way of a compensation mechanism among the participating Member states, on a rate set at no less than 0.2% of the value of the transaction. If adopted under EU law, the FTT shall be applicable only to the Member states participating in the enhanced cooperation mechanism, after a unanimous Council decision of the participating countries and in consultation with the European Parliament.

EU Parliament Adopts Resolution Urging Revisions to EU Tax Blacklist Process

The EU Parliament has adopted a resolution calling for a wider scope, tougher criteria and a more transparent listing process concerning the EU’s list of non-cooperative tax jurisdictions. The Parliament in its resolution notes that “jurisdictions currently on the list cover less than 2 % of worldwide tax revenue losses, making the list confusing and ineffective” and calls for “increased transparency and consistency, stricter and more impartial listing criteria, and stronger defensive measures against tax avoidance”. The Parliament also expressly noted that it “deplores the removal of countries with a clear record of promoting BEPS, such as the Cayman Islands, from the list”.


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.