Taxation will be in the spotlight this week with a burst of new measures expected. The European Commission will also present, on Wednesday 15 July, its “action plan for fair and simple taxation supporting the recovery strategy”.
The action plan, which will take the form of a communication, will contain 25 measures, the Director for Direct Taxation at the Commission’s Directorate-General for Taxation (DG TAXUD), Benjamin Angel, said on Twitter on Saturday 11 July.
What should we expect? The action plan is expected focus on the fight against tax fraud and the simplification of tax procedures.
In a written reply to a parliamentary question (see EUROPE 12518/20), the European Commissioner for Taxation, Paolo Gentiloni, had already announced that the proposed measures would include a framework for a preventive dialogue between tax administrations with a view to a common solution to the cross-border tax problems encountered by SMEs.
According to our information, the Commission is also expected to propose the use of digital solutions, such as electronic invoicing. It should also strengthen the role of the European network of anti-fraud experts Eurofisc and propose measures to improve administrative cooperation with non-Member States in order to combat cross-border VAT fraud.
New rules for VAT schemes for travel agents and certain financial services are planned. The action plan will also address the issues of tobacco and alcohol taxation.
However, nothing is expected on digital taxation (see other news). The Commission has already indicated on several occasions that it wants to wait for the outcome of the international negotiations at the OECD in 2020 before relaunching a proposal at European level. A Commission communication on this subject is expected in the autumn.
DAC7. Another known element: the Commission is expected to present on the same day a proposal for a Council Directive amending Directive (2011/16/EU) on administrative cooperation in the field of taxation (ATC).
This proposed ‘DAC7’ directive should introduce a new obligation for digital platforms operating in the EU, such as Uber and Airbnb. They would be obliged to report to the tax authorities the revenues generated by vendors or service providers using their platform. For example, Uber would be obliged to report all revenues generated by its drivers to tax authorities.
EU tax authorities would then exchange information on the basis of the requirements of the ‘DAC’. According to our information, there should be no exemption from these reporting requirements for start-ups or vendors or service providers that generate little income.
Blacklist. Also expected on Wednesday is a communication on “good governance in tax matters in the EU and beyond”. It should be noted that in its roadmap published in March (see EUROPE 12440/20), the Commission only envisaged an “external strategy on good governance in tax matters for 2020”.
According to our information, the Communication should contain several suggestions for revising the 1997 “Code of Conduct for Business Taxation”, which sets out the criteria for assessing potentially harmful tax measures.
In addition, the Commission could propose new criteria for the EU ‘blacklist’ of non-cooperative jurisdictions in the tax field and to improve the consistency between the EU list and national blacklists.
State Aid. Finally, on Tuesday 14 July, the EU institution is expected to present a recommendation on “on conditioning State financial support to undertakings in the Union on the absence of links to non-cooperative jurisdictions” from a tax perspective.
The recommendation will explain to Member States how they can set up such a link, Mr Angel said on Monday 13 July at a hearing in the European Parliament (see other news).
Several countries, such as Poland, Denmark and France, have decided not to grant economic aid to cope with the Covid-19 pandemic to companies based or having subsidiaries in tax havens. (Original version in French by Marion Fontana)