The European Commission’s 2018 ‘European semester winter package’ has identified harmful tax practices in seven EU member states. A new taxation paper also provides evidence of aggressive tax planning structures in use.
The European semester contains individual country reports providing an annual analysis of the economic and social situation in each of the member states. For the first time in the context of these analyses, ‘the Commission is stressing the issue of aggressive tax planning in seven EU countries: Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta and The Netherlands’, said taxation commissioner Pierre Moscovici.
The reports outline:
Ireland: absence of anti-abuse rules for the exemption from withholding taxes on dividend payments made by companies based in Ireland;
Luxembourg: absence of withholding taxes on royalty and interest payments and the lack of some anti-abuse rules;
The Netherlands: absence of withholding taxes on dividend payments by co-operatives, the possibility for hybrid mismatches using the limited partnership, absence of withholding taxes on royalties and interest payments, and the lack of anti-abuse rules;
Belgium: patent box and delay in transposing ATAD into national law;
Cyprus: tax rules on corporate tax residency, absence of withholding taxes on dividend, interest and royalty payments by Cyprus companies, risks associated with the design of Cyprus’s notional interest regime, and the lack of anti-abuse rules;
Hungary: relatively high capital inflows and outflows through special purpose entities having little or no effect on the real economy, absence of withholding taxes on dividend, interest, and royalty payments made by companies based in Hungary, and patent box;
Malta: planned notional interest deduction regime, absence of withholding taxes, and the lack of anti-abuse rules.
The Commission has also published a new taxation paper on ‘aggressive tax planning indicators’, which provides economic data on tax planning structures in use in EU member states. The report (http://bit.ly/2trjF3I), groups these structures into three types:
The European Commission’s 2018 ‘European semester winter package’ has identified harmful tax practices in seven EU member states. A new taxation paper also provides evidence of aggressive tax planning structures in use.
The European semester contains individual country reports providing an annual analysis of the economic and social situation in each of the member states. For the first time in the context of these analyses, ‘the Commission is stressing the issue of aggressive tax planning in seven EU countries: Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta and The Netherlands’, said taxation commissioner Pierre Moscovici.
The reports outline:
Ireland: absence of anti-abuse rules for the exemption from withholding taxes on dividend payments made by companies based in Ireland;
Luxembourg: absence of withholding taxes on royalty and interest payments and the lack of some anti-abuse rules;
The Netherlands: absence of withholding taxes on dividend payments by co-operatives, the possibility for hybrid mismatches using the limited partnership, absence of withholding taxes on royalties and interest payments, and the lack of anti-abuse rules;
Belgium: patent box and delay in transposing ATAD into national law;
Cyprus: tax rules on corporate tax residency, absence of withholding taxes on dividend, interest and royalty payments by Cyprus companies, risks associated with the design of Cyprus’s notional interest regime, and the lack of anti-abuse rules;
Hungary: relatively high capital inflows and outflows through special purpose entities having little or no effect on the real economy, absence of withholding taxes on dividend, interest, and royalty payments made by companies based in Hungary, and patent box;
Malta: planned notional interest deduction regime, absence of withholding taxes, and the lack of anti-abuse rules.
The Commission has also published a new taxation paper on ‘aggressive tax planning indicators’, which provides economic data on tax planning structures in use in EU member states. The report (http://bit.ly/2trjF3I), groups these structures into three types:
