At the ‘Economic and Financial Affairs’ Council on Friday 16 June, EU finance ministers are expected to approve conclusions on the progress made by the Code of Conduct Group during the Swedish Presidency. EUROPE has obtained the summary document.
Harmful tax regimes within the EU. Since the end of 2022, the Code of Conduct Group has identified four harmful tax regimes in the EU which are subject to standstilland rollback review processes: - the law on investment promotion in Croatia; - amendments to the holding company regime in Poland; - exemption from payment of the tax specific to certain activities for taxpayers in the hotel, restaurant and catering sector in Romania; - support for start-up ecosystems in Spain.
The status quo prohibits new or more restrictive exceptions to the minimum standard of treatment. Dismantling is the liberalisation process by which non-compliant measures are reduced and ultimately eliminated. In the end, the Group decided that it was not necessary to assess the Romanian exemption. The amendment to the holding company regime in Poland has been approved and a draft assessment is due to be prepared by the Group. Proceedings against Croatia and Spain will continue in the second half of the year.
With regard to the examination procedures already underway, the one concerning the use of the safe harbour rule in Cyprus should be discontinued, as the Member State has decided to put an end to it. However, this measure is still in force in Poland, so monitoring should continue.
Cooperative compliance programmes. On Thursday 25 May, the Group will examine existing cooperative compliance programmes (CCPs) in each Member State to ensure that they do not give rise to substantial advantages that could lead to less tax being paid. Launched in 2020 by the European Commission, the aim of this programme is to facilitate and promote compliance with tax obligations by taxpayers on the basis of increased cooperation, trust and transparency between taxpayers and tax administrations and between tax administrations.
Defensive tax measures against third country jurisdictions. Currently, 24 Member States apply at least one administrative measure and eleven apply at least two. 21 Member States apply defensive measures of an administrative and legislative nature in respect of the courts on the EU list, while three Member States apply defensive measures in accordance with their national listing procedure. These measures are as follows: - rules relating to controlled foreign companies (CFCs); - non-deductibility of costs; - withholding tax; - a limit to the exemption from participation.
Read the document: https://aeur.eu/f/7fg (Original version in French by Anne Damiani)