Brussels, 15/06/2016 (Agence Europe) - Seven delegations expressed certain concerns regarding the anti-tax avoidance directive on Wednesday 15 June, at the meeting of the Committee of Permanent Representatives of the member states to the EU (Coreper).
26 delegations took the floor during the Coreper meeting. The Czech Republic reiterated that it was requesting a legislative proposal to authorise it to carry out a pilot project on the fight against VAT fraud (see EUROPE 11572). The Commission does not seem inclined to agree to this. It also appears impossible, from a logistical point of view, to put together a legislative proposal on this in two days flat. The German delegation is furthermore reported to have brought its influence to bear to get Prague to back down, reminding it that up to now, it has supported it in its request for a pilot project. The Dutch Presidency of the Council of the EU noted the political reservation of the Czech Republic, adding that it would remain in contact to see how the issue could be overcome.
Luxembourg said that it cannot give its agreement because under a certain provision (on the rules on 'controlled foreign companies'), it would be incumbent on businesses (one the tax authorities) to prove that they have substantive economic activities. The Luxembourg representative said that this goes beyond the case-law of the Court of Justice of the EU and the legal services of the Council are reported to take a similar view.
Austria, Belgium and Slovenia still have issues with limiting the tax deduction of loan interest. Austria wants to be able to keep its own rules, which it feels are highly effective. “The idea of a directive is to harmonise the rules”, a European source pointed out. On this specific rule, Estonia and Spain are still calling for loans taken out up until the point at which the directive enters into force (2020) to be excluded from its scope of application. At the moment, the text excludes loans concluded before 22 May 2016.
Malta is reported still to have a reservation on the declaration underpinning the directive, which calls upon the Commission to present a proposal by October 2016 to include situations with third countries in the scope of the provisions on hybrid mismatches. For the time being, the text is limited to intra-EU situations. For its part, Estonia is reported to have said that it wants to see the switchover clause (moving from tax exoneration to tax credit) deleted from the text, which may indeed happen. (Original version in French by Élodie Lamer)