The Council of the European Union has been busy this week in the area of both direct and indirect taxation at EU and international level.
First, in the area of direct taxation, the Council adopted rules on the exchange of tax-related information on multinational enterprises (MNEs). The directive, which is part of the EU Commission’s Anti-Tax Avoidance Package, builds on OECD’s BEPS Action 13 and is aimed at groups of companies with a total consolidated group revenue of at least €750 million. Starting with the 2016 fiscal year, MNEs will be required to report information on their profits, taxes paid, tangible assets, number of employees, etc. Non-EU resident parent companies will have to file a report through their EU subsidiaries. The information will be exchanged automatically amongst tax authorities.
The deadlines set by the directive include:
Member States are to implement penalties in cases of breaches.
In the area of indirect taxation, the Council has adopted a directive, amending the VAT Directive, whereby the minimum standard VAT rate of 15% will be maintained until 31 December 2017. This, according to the Council, will help prevent excessive divergence in VAT rates applied across different Member States, distortions of competition that could arise as a result, and ensure legal certainty. Discussions on the features of a definitive EU VAT regime are ongoing. At global level, the Council agreed on the establishment of an EU list of third country non-cooperative jurisdictions, more commonly known as tax havens. The Code of Conduct Group will commence work on such a list by September 2016.
This article appears in the JHA May 2016 Tax Newsletter, which also features:
