European Commission Tax & Compliance Bulletin 61

Printable Version

Commission Proposes to Postpone DAC6 Reporting Implementation:

The European Commission has published proposals for Council decisions to postpone deadlines imposed by the EU Directive on Administrative Cooperation by 3 months.

This follows on from public requests made by financial and professional association organisations, seeking leniency in the enforcement of penalties and deadlines contained within the Directive due to the extraordinary consequences of the COVID-19 outbreak which have resulted in severe disruption across the European economy.

As concerns the Directive on Administrative Cooperation, the proposal would:

  • Defer the time limit for exchanges of information on Reportable Financial Accounts by 3 months, i.e. until 31 December 2020;
  • Change the date for the first exchange of information on reportable cross-border arrangements that feature in Annex IV to Council Directive 2011/16/EU from 31 October 2020 to 31 January 2021;
  • Change the date for the beginning of the period of 30 days for reporting cross-border arrangements which are included in Hallmarks listed in Annex IV to Council Directive 2018/822/EU from 1 July 2020 to 1 October 2020;
  • Change the date for the reporting of the ‘historical’ cross-border arrangements (i.e. arrangements that became reportable from 25 June 2018 to 30 June 2020) from 31 August 2020 to 30 November 2020.

The Commission has also included in the proposal concerning the Directive on Administrative Cooperation the possibility of extending the reporting deadlines for a further 3 months, depending on the continued evolution of the coronavirus impact on the EU.

EU Commission Publishes Anti-Money Laundering Action Plan: 

The Commission has adopted an Action Plan for a comprehensive Union policy on preventing money laundering and terrorist financing. The plan is comprised of 6 pillars, which the Commission aims to deliver on by 2021. The pillars are:

  1. Effective implementation of existing rules;
  2. A single EU rulebook;
  3. EU-level supervision;
  4. A support and cooperation mechanism for financial intelligence units;
  5. Better use of information to enforce criminal law;
  6. A stronger EU in the world.

Delivery of EU Tax Package Delayed Until July 2020:

EU Commission proposals previously anticipated to be published in Spring of this year are now set to be released in July. An indicative planning document details that the Commission’s Anti-Fraud Package, and Customs Union Package are expected to be published in mid-July, though the agenda notes that this is yet to be confirmed.

The Anti-Fraud Package will be comprised of:

  • Communication on an ‘Action Plan to fight tax evasion and to make taxation simple and easy’  Communication on ‘Tax good governance in the EU and beyond’
  • Revision of the Directive on automatic exchange of information – DAC7

The Customs Union Package will be comprised of an Action Plan on the Customs Union and a legislative proposal on the Customs Single Window.

EU Commission Publish Infringement Package:

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

Letters of formal notice were sent to eight Member States, namely Belgium, the Czech Republic, Estonia, Ireland, Greece, Luxembourg, Austria and Poland, as well as the UK, for failing to fully implement the 5th Anti-Money Laundering Directive. The countries will have two months to notify the Commission that the Directive has been implemented, or will thereafter be issued with reasoned decisions.

Luxembourg and Portugal were issued with letters of formal notice for incorrectly transposing the interest limitation rule in the Anti-Tax Avoidance Directive. Additionally, Romania was issued with a reasoned opinion concerning the failure to have in place proper IT systems for the monitoring of the circulation of excise goods of alcohol, tobacco and energy products within the EU.

The Commission has also referred the Netherlands to the Court of Justice for breaching the fundamental EU freedoms by its imposition of taxation on the transfer of pension capital to other Member States, which is not imposed on domestic transfers of pension capital.

European Spring Semester Package Released:

The European Commission has published its Spring Semester Package, evaluating the main economic challenges and opportunities for Member States and setting out Country-Specific Recommendations in light of their present circumstances.

The Spring Package focuses in particular on the impact of the coronavirus epidemic on Member States’ national finances and economic performance, and recommendations are based on the need for a coordinated European response to mitigate the economic damage and to attempt to ensure stability and equality in recovery throughout Europe.

France to Impose Digital Tax in Absence of OECD Agreement:

French Finance Minister Bruno Le Marie has confirmed that France will only proceed with the imposition of its planned digital tax should no agreement be reached at OECD level by the end of 2020.

The French digital tax was signed into law on 24 July 2019, imposing a 3% digital services tax on resident and non-resident companies with a global turnover above 750 million Euros, and a national turnover above 25 million Euros. US President Donald Trump tweeted that there would be “substantial reciprocal action” taken by the US concerning the digital tax. In January, Steven Mnuchin, the US Treasury Secretary and Bruno Le Marie agreed to avoid a potential trade war following the introduction of the French Digital Services Tax. The US side agreed to suspend the imposition of tariffs on French goods whilst France agreed not to collect the digital tax until the end of 2020, subject to an OECD agreement by the end of year.

EU Commission Presents Recovery Package Proposal:

On 27 May, the EU Commission presented its recovery package proposal to “repair and prepare” the European Union following the impact of the coronavirus crisis on the EU economy. The package comprises a new recovery instrument, the Next Generation EU, embedded within the EU budget for 2021 – 2027, as well as specific reforms to the EU budget itself. An updated Work Programme was also published alongside the proposals.

EU Launches Digital Services Act Package Consultation:

The EU Commission has launched a consultation concerning its Digital Services Act Package, which is expected to be released by the end of 2020. The Digital Services Act Package will introduce a modernised regulatory framework for digital services, in particular concerning: 1) the fundamentals of the e-commerce directive, by introducing rules concerning the role of online intermediaries, as well as an EU-wide governance system; 2) ensuring a level playing field in European digital markets, likely by introducing additional rules for platforms of a certain size, as well as specific regulatory requirements.

The consultation will run until 8 September 2020. Input can be submitted here.

 

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.