There have been calls in the European Parliament for an investigation into any wrongdoing exposed by the Pandora Papers that took place in EU jurisdictions.
Adopting a resolution on October 22 by 578 votes in favor, 28 against, and 79 abstentions, MEPs identified what they see as “the most urgent measures the EU needs to take to close loopholes that currently allow for tax avoidance, money laundering and tax evasion on a massive scale.”
They also called for legal action to be taken by the Commission against EU countries that do not properly execute existing laws, noting that numerous member states are delayed in their implementation of existing rules intended to counteract money laundering and tax avoidance. They called on the Commission to analyze whether further legislation should be proposed and establish if legal action against some member states is warranted.
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The European Council announced that it had adopted an amendment to the VAT Directive to introduce a temporary VAT exemption on importations and on certain supplies in response to the COVID-19 pandemic.
The “buy and donate” directive, which applies retroactively from January 1, 2021, will make it easier for the Commission and EU agencies to buy goods and services to distribute them free of charge to member states in the context of the ongoing public health crisis.
Through this update, purchases of goods and services by an EU body on behalf of member states to respond to the emergency posed by the COVID-19 pandemic are temporarily added to the list of exempted transactions in the VAT Directive. The new exemption will allow for more donations to member states and their institutions, as it will relieve the EU bodies of the budgetary and … Read More »
The EU’s VAT E-Commerce Reform package is set to come into force on July 1, 2021.
Various of the EU member states – including most recently Poland, which saw its Council of Ministers sign off on the adoption of the new measures – have said that they are good to go with regard to the package, which aims to level the playing field between online and ‘bricks and mortar’ providers of goods and services, in addition to ensuring that the right amount of VAT gets collected, and in the ‘right’ places, by steering things towards the destination principle of taxation.
However, a number of business associations in the EU, including those most likely to feel the impact of the measures as they will be required to administer certain aspects of it, have argued that the EU as a whole may not be … Read More »
The EU has been mulling over the anticipated economic impact of the Brexit split. Releasing its Winter 2021 Economic Forecast, the EU suggested that Brexit will dent UK economic growth considerably, more than for the European Union, despite the new free trade deal between the two parties.
The free trade deal between the UK and the EU provides for zero tariffs and zero quotas on all goods trade that complies with the appropriate rules of origin. However, the report highlights that non-tariff barriers have increased substantially for both imports and exports from and to the UK.
“…[W]hile the FTA improves the situation as compared to an outcome with no trade agreement between the EU and the UK, it cannot come close to matching the benefits of the trading relations provided by EU membership,” the report observed.
It estimated that, for the EU, on … Read More »
The finance ministers of France, Italy, Spain, and the United Kingdom have reportedly sent a letter to the US Treasury Secretary, Steven Mnuchin, proposing that new international tax rules for digital companies could be gradually phased in.
The ministers suggest in the letter, seen by Bloomberg News, that tax rules for providers of digital services could initially be restricted to those companies providing “automated” digital services and later could be applied more widely.
By offering such a compromise, the European countries are hoping to persuade the US to re-join negotiations towards the creation of an internationally-agreed framework of tax rules for digital companies. They reportedly suggested that an agreement that includes the US could be reached by the end of 2020 if a phased approach to the introduction of these rules was on the table.
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EU member states have reached a provisional agreement on modernized taxation rules for alcohol products, following a meeting held on June 24, at which member states’ ambassadors to the EU provisionally endorsed proposals to update the excise duty rules on alcohol within the EU.
Since 1992, EU countries have had in place common rules to ensure that excise duties are applied in the same way and to the same products everywhere in the EU. These rules include minimum excise duty rates. The reform package will extend the special regime of reduced excise duty rates for small beer and ethyl alcohol producers to producers of other fermented drinks, such as cider. It will increase the threshold for lower strength beer that can benefit from reduced rates from 2.8 percent volume to 3.5 percent volume, with the aim of incentivizing consumers to choose … Read More »
Digital tax matters were on the table for the European Commission, which has published an economic recovery plan (as part of its response to the coronavirus pandemic), which includes a possible digital tax, a crackdown on tax fraud, in addition to revisiting its proposals for a common consolidated corporate tax base.
The Commission intends to borrow EUR750bn on the financial markets to fund the package. To repay these funds, the Commission will propose a number of new “own resources.”
According to the EC plan, options for reform could include a new digital tax on companies with global annual turnover over EUR750bn, which could raise an estimated EUR1.3bn per year, and a Carbon Border Adjustment Mechanism, which could take the form of a tax on imports to the European Union that do not face environmental levies equal to the EU’s in their country … Read More »
The European Union has finalized regulations to complete the legislative framework for e-commerce reforms that will be implemented from 2021.
A new Regulation provides details for registration in the VAT One Stop Shop, including the Import One Stop Shop, and for the VAT One Stop Shop return.
Under plans initially approved by the Economic and Financial Affairs Council in November 2017, the EU will extend the existing mini one-stop shop (MOSS) from January 1, 2021.
MOSS was introduced alongside reforms in January 1, 2015, to simplify VAT compliance for firms that faced new rules obligating them to collect VAT on business-to-consumer (B2C) supplies of broadcasting, telecommunications, and electronic (BTE) services based on the location of the consumer, rather than the supplier.
MOSS is to be expanded from 2021 into a “One Stop Shop” (OSS), which will cover:
All B2C supplies of services, including by non-EU … Read More »
On February 18, the EU revealed that it has added the Cayman Islands, Palau, Panama, and the Seychelles to its list of non-cooperative tax jurisdictions, bringing the total tally to 12 from 8.
The European Council, which agreed the additions, stated that these jurisdictions had failed to implement the tax reforms to which they had committed by the agreed deadline; most commitments delivered upon by third-country jurisdictions involved a deadline of the end of 2019.
The Council also reported that it had amended its “grey list”, of jurisdictions cooperating with the EU to amend their tax systems. In light of their implementation of reforms in compliance with EU tax good governance principles within the required timeframe, the following jurisdictions have been removed from the grey list: Antigua and Barbuda, Armenia, the Bahamas, Barbados, Belize, Bermuda, the British Virgin Islands, Cabo Verde, the … Read More »
Infringement proceedings have been launched against 14 EU member states for failing to implement the so-called value-added tax quick fixes.
The VAT quick fixes were included in Council Directive (EU) 2018/1910 of December 4, 2018. They are intended to simplify VAT compliance for businesses and strengthen and harmonize existing EU rules ahead of the introduction of more comprehensive reforms to EU VAT law scheduled for 2021.
The four short-term measures provide:
That the VAT identification number of the customer, allocated by a member state other than that in which dispatch or transport of the goods began, should constitute an additional substantive condition for the application of the exemption in respect of an intra-Community supply of goods.
For more uniform rules when determining the VAT treatment of chain transactions, including triangular transactions, clarifying in particular which party should benefit from zero-rated treatment;
New VAT rules for … Read More »