EU tax policy developments are a bit of a moving target, and even more so in these difficult coronavirus times.
The European Commission has now announced a slight delay – and possible new content – to its upcoming tax package, whilst Germany intends to put tax as one of the priorities for its upcoming presidency of the EU Council.
According to latest information, the European Commission has postponed its tax package, initially scheduled for 10 June, to 15 July. This is hardly surprising in the current context, but for some while it looked as if the Commission was staunchly determined to stick to its original timing on its tax initiatives.
As previously reported, this new tax package will consist of an action plan for fighting tax evasion and to ‘make taxation simple and easy’, which sounds like a tall promise. Moreover, the tax package will include a new legislative proposal to bring online platforms into the scope of the Commission’s Directive on Administrative Cooperation (so-called DAC 7).
The Commission also announced what looks like a third and new element: a Communication (non-legislative document of intent) on ‘tax good governance in the EU and beyond’. This is potentially linked to the Commission’s earlier announcement to launch a new external strategy to promote ‘good tax behaviour’ by third countries. But the wording of the Commission’s announcement implies that there might be an intra-EU dimension to it too.
This would not be surprising, given that there is new emerging momentum in the EU on the tax front, prompted by the corona crisis. For example, several EU member states, as well as the European Parliament, are calling for the various corona state aid measures to be linked to tax criteria. These initiatives include barring from corona state aid such businesses that are registered in jurisdictions that feature on the EU’s list of ‘tax havens’, or obliging state aid receiving companies to do public country by country reporting (CBCR).
Another interesting point is that the Communication on business taxation for the 21st century, which was to be released on 24 June, appears to be absent from the Commission’s current timeline. This might be due to the OECD recently announcing that it will postpone a political agreement on international tax reform and digital taxation to October. As the Commission’s Communication would essentially be about EU action in light of OECD progress (or lack thereof), it makes sense for this to be pushed further into the future too.
And finally, on the Council’s side Germany is currently preparing to take up the presidency of the EU Council from Croatia in July. The EU Council has a rotating Presidency system, in which EU member states take turns to take over chairing of the Council’s for a period of six months. Whomever presides has great influence over the Council’s agenda and priorities.
It is interesting, that according to announcements by Angela Merkel and Germany’s finance minister Olaf Scholz, taxation will feature high in the priorities of the German Council Presidency – alongside with other key priorities such as climate change, economic recovery from the corona crisis and revamping Europe’s healthcare systems.
More specifically, both Merkel and Scholz announced that Germany would focus its efforts on carbon taxation, minimum taxation and the financial transaction tax.
It has become almost fashionable nowadays to say that after coronavirus, there is no returning to the ‘normal’. But in the world of tax, and given how much political momentum it continues to gather, the question is whether we ever even left the normal-zone?
EU tax policy developments are a bit of a moving target, and even more so in these difficult coronavirus times.
The European Commission has now announced a slight delay – and possible new content – to its upcoming tax package, whilst Germany intends to put tax as one of the priorities for its upcoming presidency of the EU Council.
According to latest information, the European Commission has postponed its tax package, initially scheduled for 10 June, to 15 July. This is hardly surprising in the current context, but for some while it looked as if the Commission was staunchly determined to stick to its original timing on its tax initiatives.
As previously reported, this new tax package will consist of an action plan for fighting tax evasion and to ‘make taxation simple and easy’, which sounds like a tall promise. Moreover, the tax package will include a new legislative proposal to bring online platforms into the scope of the Commission’s Directive on Administrative Cooperation (so-called DAC 7).
The Commission also announced what looks like a third and new element: a Communication (non-legislative document of intent) on ‘tax good governance in the EU and beyond’. This is potentially linked to the Commission’s earlier announcement to launch a new external strategy to promote ‘good tax behaviour’ by third countries. But the wording of the Commission’s announcement implies that there might be an intra-EU dimension to it too.
This would not be surprising, given that there is new emerging momentum in the EU on the tax front, prompted by the corona crisis. For example, several EU member states, as well as the European Parliament, are calling for the various corona state aid measures to be linked to tax criteria. These initiatives include barring from corona state aid such businesses that are registered in jurisdictions that feature on the EU’s list of ‘tax havens’, or obliging state aid receiving companies to do public country by country reporting (CBCR).
Another interesting point is that the Communication on business taxation for the 21st century, which was to be released on 24 June, appears to be absent from the Commission’s current timeline. This might be due to the OECD recently announcing that it will postpone a political agreement on international tax reform and digital taxation to October. As the Commission’s Communication would essentially be about EU action in light of OECD progress (or lack thereof), it makes sense for this to be pushed further into the future too.
And finally, on the Council’s side Germany is currently preparing to take up the presidency of the EU Council from Croatia in July. The EU Council has a rotating Presidency system, in which EU member states take turns to take over chairing of the Council’s for a period of six months. Whomever presides has great influence over the Council’s agenda and priorities.
It is interesting, that according to announcements by Angela Merkel and Germany’s finance minister Olaf Scholz, taxation will feature high in the priorities of the German Council Presidency – alongside with other key priorities such as climate change, economic recovery from the corona crisis and revamping Europe’s healthcare systems.
More specifically, both Merkel and Scholz announced that Germany would focus its efforts on carbon taxation, minimum taxation and the financial transaction tax.
It has become almost fashionable nowadays to say that after coronavirus, there is no returning to the ‘normal’. But in the world of tax, and given how much political momentum it continues to gather, the question is whether we ever even left the normal-zone?
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