EU Tax & Compliance Bulletin 54

Printable Version

EU: Member States could be candidates for the non-cooperative jurisdictions blacklist from March 2020:

The Danish government has prepared a document, supported by Germany, France, Spain and Austria among others, urging EU finance ministers across the bloc to discuss extending the criteria for its blacklist of ‘non-cooperative jurisdictions’, so that EU Member States can be included on the list. The current criteria restricts the list to third countries. The new European Commission took office on 1 December under new president Ursula von der Leyen, and a review of the criteria is scheduled to take place by March 2020. The proposal calls for a discussion on whether the current criteria ‘provide sufficient protection against tax avoidance and evasion’, and asks, ‘Do we [the EU] internally have sufficient safeguards against tax avoidance and evasion?’

According to Reuters, the European Commission supports the Danish initiative.

APPLE: Apple CEO “Desperate” for Fair International Tax System:

The CEO of Apple Tim Cook said that overhaul of international tax rules is overdue, hoping of success of the intergovernmental discussions at OECD level. “It’s very complex to know how to tax a multinational company. We desperately want it to be fair,” the Apple CEO said after receiving an award from the IDA, the Irish government body for foreign direct investment.

EUROJUST: European Authorities Target Large-Scale VAT Fraud Scheme:

In a coordinated action of the police and judicial authorities of a number of EU Member states, a large-scale VAT carousel scheme involving luxury cars was cracked down last week. The VAT carousel scheme involved purchase of luxury vehicles and other luxury products, which were immediately sold in France, but no VAT was paid at the purchase, therefore defrauding the French Tax Administration for an amount of over 12 million Euros. Luxury cars as well as over 100,000 Euros in cash were seized from 33 premises in France, Romania, Bulgaria, the Czech Republic, Spain, Latvia, Germany, and Lithuania, the European Union Agency for Criminal Justice Cooperation (EUROJUST) stated.

IRELAND: First reporting deadline for cross-border tax arrangements is 31 August:

The Irish Finance Act 2019 was signed into law on 22 December 2019, enacting Council Directive (EU) 2018/822 (DAC6). DAC6 requires intermediaries and taxpayers to report cross-border tax arrangements to the Irish revenue authorities. The first reports will need to be made by 31 August 2020, and will cover arrangements between 25 June 2018 and 1 July 2020. The same dates apply in the UK under the International Tax Enforcement (Disclosable Arrangements) Regulations 2020 No 25.

MONEY LAUNDERING: Andorra re-rated ‘largely compliant’:

The Council of Europe’s MONEYVAL organisation has re-rated Andorra as ‘largely compliant’ in its intensive monitoring process. The principality has improved compliance with the Financial Action Task Force’s (FATF’s) recommendations on regulation and supervision of financial and designated non-financial institutions, and on beneficial ownership. However, MONEYVAL’s follow-up report did show continuing deficiencies in Andorra’s anti-money laundering enforcement regime, finding that the jurisdiction has failed to make progress in meeting the FATF recommendations around the abuse of non-profit organisations.

US: proposes opt-out from OECD’s new transfer pricing and nexus rules:

The US government has suggested that it could retain its own international taxation rules rather than accepting the OECD’s efforts to reform the current global standards. The OECD is promoting international negotiations aimed at reaching a multilateral agreement on digital taxation, so that large multinational enterprises that conduct business over the internet cannot assign their taxable revenues to low-tax jurisdictions.

FRANCE: suspends digital services tax for one year:

The French government has agreed to suspend collection of its digital services tax (DST) until the end of 2020, in order to avoid increased tariffs with the US government. The 3 per cent tax was enacted by France’s senate in July last year. It applies to companies with digital revenues of more than EUR25 million in France and EUR750 million worldwide, and thus will affect mainly large American-based companies that profit from online services delivered in other countries while paying little tax there.

UK: finalises cross-border tax planning disclosure regulations:

The UK government has made final regulations implementing Council Directive (EU) 2018/822 (DAC6) requirements on the mandatory disclosure of cross-border tax arrangements.

The Directive, adopted in May 2018, requires intermediaries such as tax advisors, accountants and lawyers to report to their national tax authority any cross-border tax planning schemes in which they are involved, if the scheme bears ‘hallmarks’ showing it to be potentially ‘aggressive avoidance’. EU Member States will exchange this information through a central database.

UK AML: new regulations in force:

With the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 now in force, HMRC has warned that all firms are required to be fully compliant with the new requirements from 10 January, although the short lead-in time will be taken into account when assessing any sanctions.

In particular, says HMRC, trust or company service providers and money service businesses who apply to register from 10 January will not be able to carry out relevant activity until HMRC has determined their application.

UK: government transposes 5AMLD on time:

The UK government has enacted regulations bringing into force the EU Fifth Anti-Money Laundering Directive (5AMLD). The provisions are contained in the Money Laundering and Terrorist Financing (Amendment) Regulations 2019, laid before parliament on 19 December and enacted the following day. Most of them will come into effect on 10 January, the EU’s official deadline for Member States to transpose 5AMLD into national legislation, although few other countries are ready to do so. Although the UK is due to leave the EU later this year, it has nevertheless agreed to transpose the Directive.


Source: STEP | Malta Institute of Taxation

Please contact David Marinelli should you wish to discuss any matter relating to jurisdiction & compliance risk management pertaining to your business or your clients.