The Spanish Presidency of the EU Council, which began its term on Saturday 1 July, will have its work cut out when it comes to taxation. “We will expedite files regarding corporate, indirect and customs taxation with the aim of streamlining the burden for individuals and companies, and to combat tax evasion and avoidance”, the Presidency has pledged.
Under the Swedish Presidency, the only agreement reached in the area of taxation was the revision of the Directive on Administrative Cooperation (DAC 8) (see EUROPE 13183/1). As regards the ‘UNSHELL’ directive, which sets out rules to prevent the misuse of shell companies for tax purposes, no proposal has been put forward since March (see EUROPE 13148/24). According to the Commissioner for Economy, Paolo Gentiloni, the presentation of the ‘SAFE’ initiative on aggressive tax planning has been postponed in order to “not overload the pipeline” (see EUROPE 13212/17). Spain’s task will therefore be to make progress on this dossier, ahead of ‘SAFE’ (see EUROPE 13212/16).
In September, the Commission will also present the initiative ‘Business in Europe: A Framework for Income Taxation’ (BEFIT) (see EUROPE 13212/17). It hopes that this proposal will enable the relaunch of ‘DEBRA’ (debt-equity bias reduction allowance), introducing deductibles to reduce tax incentives favouring indebtedness, which has been blocked since December 2022 (see EUROPE 13087/25).
Lastly, negotiations on Pillar One of the OECD agreement on the taxation of multinationals are progressing well, according to the Commission (see EUROPE 13214/22). This pillar includes a new system for allocating taxation rights and a multilateral agreement is expected by mid-July. It will then be adopted by the Member States. At the same time, the implementation of Pillar Two, which is intended to establish a minimum tax rate of 15%, is in progress.
With regard to indirect taxation, the Presidency will have to work on the ‘ViDA’ initiative on value added tax (VAT) in the digital age, which the European finance ministers debated at the last Ecofin Council in June (see EUROPE 13203/4). Although there is a consensus on the principle of modernisation, the details of this directive require some work.
“The Spanish Presidency will continue to promote the legislative proposals on energy contained in the ‘Fit for 55’ initiative, related to [...] energy taxation”, the programme states. Spain will therefore have to restart negotiations, which broke down in February due to a lack of agreement (see EUROPE 13116/13).
The Presidency will also have to begin work on ‘FASTER’, the new withholding tax procedure on cross-border financial income, presented in June (see EUROPE 13204/18).
Lastly, the European list of non-cooperative jurisdictions (see EUROPE 13121/30) and the European Union’s ‘grey’ list of third countries and jurisdictions that have made commitments regarding good tax governance (see EUROPE 13121/30) will be reviewed in October.
Spain has also taken a stance in favour of ending unanimity in tax matters.
Read the Spanish Presidency’s programme: https://aeur.eu/f/7v4 (Original version in French by Anne Damiani)