BRUSSELS | SEPTEMBER 2020
New CFE Executive Board Appointed by General Assembly
CFE Tax Advisers Europe is pleased to announce that a new Executive Board for the period of 2021-2022 was elected at its online General Assembly on 25 September 2020. The new Executive Board will take up their duties on 1 January 2021.
The General Assembly, the governing body of CFE Tax Advisers Europe, unanimously re-elected Piergiorgio Valente as President (Managing Partner, Valente Associati GEB Partners and Crowe Valente, and Professor at Link Campus University, Rome, Italy). Martin Phelan was also unanimously re-elected as Secretary-General (Partner, Head of William Fry Tax Advisers, Ireland), as was Branislav Kováč in the position of Treasurer (Partner VGD SLOVAKIA, s.r.o., Board Member of the Slovak Chamber of Tax Advisers, Slovakia).
The General Assembly appointed two board members who will serve as Technical Committee Chairs: Bruno Gouthière as Chair of the Fiscal Committee (Partner CMS Francis Lefebvre and Member of Institut des Avocats Conseils Fiscaux, France) and Philippe Vanclooster as Chair of the Professional Affairs Committee (Partner, PwC, Belgium, Board Member of the Institute for Tax Advisers and Accountants, Belgium). Ian Hayes was re-appointed as Chair of the Tax Technology Committee (Council Member of the Chartered Institute of Taxation, United Kingdom).
The General Assembly re-appointed as Vice-Presidents Anna Misiak (Head of Tax Practice and Advisory, Board Member of the Chamber of Tax Advisers, Poland) and Gary Ashford (Partner Harbottle & Lewis, Council Member of the Chartered Institute of Taxation, United Kingdom). Additionally, the General Assembly appointed as new Vice-President Stella Raventós-Calvo (President of AEDAF, the Spanish Association of Tax Advisers, Partner, AddWill, Spain). Jiří Nekovář (Partner, Euro-Trend, s.r.o, Czech Republic) was also appointed to the newly created role of Executive Board Director.
The EU Commission has appealed the decision of the General Court in the €14 billion Apple State Aid case, in which the Court annulled the Commission’s decision that Ireland’s tax authorities granted Apple a “selective advantage” by failing to employ appropriate profit allocation methods to apportion income of the Irish Apple branches, in contravention of EU State aid law.
In a press release concerning the decision to appeal, EU Commission Executive Vice-President Margrethe Vestager stated, “The General Court judgment raises important legal issues that are of relevance to the Commission in its application of State aid rules to tax planning cases. The Commission also respectfully considers that in its judgment the General Court has made a number of errors of law. For this reason, the Commission is bringing this matter before the European Court of Justice. Making sure that all companies, big and small, pay their fair share of tax remains a top priority for the Commission. The General Court has repeatedly confirmed the principle that, while Member States have competence in determining their taxation laws taxation, they must do so in respect of EU law, including State aid rules. If Member States give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the European Union in breach of State aid rules.”
The final determination of the case will be made by the Court of Justice of the European Union. The Court of Justice has repeatedly disagreed with the General Court on substantive issues concerning fiscal State aid (Gibraltar, World Duty Free), where the ECJ subsequently annulled General Court judgments in particular regarding the interpretation of the notion of ‘selectivity’.
The OECD has published a blogpost discussing the role of tax systems in economic recovery from the COVID-19 impact.
The post recommends that governments “continue to use fiscal tools to provide support to affected businesses and households. Support measures should be kept in place as long as needed to avoid scarring effects and fiscal policy should remain supportive to speed up recovery”, with measures to be reduced slowly as the economic responds to the recovery measures.
The post also recommends governments aim to improve policy in the recovery process, particularly by focusing on environmental tax reform to ensure emissions are taxed appropriately. Raising tax revenue by increasing labour taxes is discouraged, and instead the report contains recommendations for fair burden sharing, by ensuring property and capital income, and digital sales are effectively taxed in order to ensure a strengthened social protection for more vulnerable members of society.
Save the date for the 13th European Webinar Conference on Tax Advisers’ Professional Affairs, to be held virtually on Friday, 20 November 2020, on the topic of “Taxpayer Rights and Legal Certainty in the Digital Era”.
The webinar conference will welcome tax experts and academics who will examine global developments in the protection of taxpayers’ rights and the impact and implications of technology on taxpayers’ rights. The conference will also review the recently published IBFD 2019 Yearbook on Taxpayers’ Rights, the most recent compilation of information by the Observatory on the Protection of Taxpayers’ Rights.
More details about the programme, line-up of speakers and registration will be available in due course.
European Commission President Von der Leyen delivered her first State of the Union address on 16 September 2020, setting out the Commission’s vision on EU recovery from COVID-19 and the strengthening and advancement of the EU.
Taxation was central to many of the issues focussed on during the address, in particular in relation to the goal announced to reduce EU emissions by 55% by 2030, up from the planned 40% decrease. The Carbon Border Adjustment Mechanism will be central to this plan, with Von der Leyen stating, “Carbon must have its price – because nature cannot pay the price anymore. This Carbon Border Adjustment Mechanism should motivate foreign producers and EU importers to reduce their carbon emissions, while ensuring that we level the playing field in a WTO-compatible way.” Von der Leyen also detailed 37% of the New Generation EU funds will be invested in projects in line with the EU Green Deal objectives, with 30% of the 750 billion Euro Next Generation EU recovery instrument to be raised through green bonds.
Digital taxation was again emphasised as a priority for the EU. Von der Leyen expressed EU support for continued international negotiations but reiterated that failing agreement an EU solution would be introduced, stating, “We will spare no effort to reach agreement in the framework of OECD and G20. But let there be no doubt: should an agreement fall short of a fair tax system that provides long-term sustainable revenues, Europe will come forward with a proposal early next year.”
OECD BEPS Action 13 CbCR Compilation
The OECD & G20 Inclusive Framework on BEPS has published a compilation of the BEPS Action 13 Country-by Country reports.
The 2020 compilation includes data from 131 jurisdictions, an increase from the previous year, and that implementation is largely consistent with the Action 13 minimum standard. The report further shows that over 90 jurisdictions have introduce legislation with filing obligations on MNEs with revenue about 750 million, with all remaining Inclusive Framework members working towards implementing similar legislation. Additionally, recommendations made for jurisdictions in the first two peer review stages were found to have largely been addressed and removed.
Further information is available here.
UN Tax Committee Consultation on Model Double Tax Treaty
The UN Tax Committee of Experts on International Cooperation on Tax Matters has invited comment on a draft paper which proposes to change the definition of royalties in the Model Double Taxation Convention Between Developed and Developing Countries. The draft proposes to amend the definition to include a reference to computer software.
The proposed change to the definition will be discussed by the Committee at the upcoming 21st Session, schedule for end October 2020.
Comments on the paper can be submitted in Word format via e-mail to taxcommittee@un.org until 2 October 2020.
The EU Commission held an online conference on 21 September, hosted by Commissioner Paolo Gentiloni, on the topic of the Role of Taxation in Recovery and Long-term Growth, examining EU taxation priorities in contending the impact of COVID-19 and EU tax policy and modern business. Speakers included Paolo Gentiloni, Olaf Scholtz, German Minister for Finance and Benjamin Angel, Director for Direct Taxation, TAXUD.
Commissioner Gentiloni set out the TAXUD priorities as EU own resources to fund COVID-19 measures, pursuing tax fairness by continuing work at the OECD level on minimum taxation and fair taxation of the digital economy, and implementing this at EU level. German Finance Minister Olaf Scholtz confirmed that fairness and how to tax corporations were a key focus, and that progress on CbCR and CCCTB were priorities for the German Presidency. Benjamin Angel confirmed Commission support for progress on the files, stating that more transparency and fighting tax havens through minimum taxation and effective taxation of multinationals were high on the EU agenda.
A virtual meeting of the Advisory Group for Co-operation with Partner Economies took place on 15 September, at which attendees from over 40 countries and 5 international and regional organisation discussed the OECD’s Global Relations Programme in Taxation.
Attendees discussed the benefits to their countries of participating in the Programme, in particular the training, e-learning and virtual classes available as part of the Programme, and the impact on their tax administrations.
Attendees also discussed the importance of supporting developing countries through initiatives such as the Global Relations Programme in Taxation, particularly in post-COVID recovery.
The European Parliament’s recently established Subcommittee on Tax Matters appointed Paul Tang from The Netherlands, S&D, to serve as Chairperson of the Subcommittee at its constitutive meeting last week. Marjus Ferber from Germany, EPP, Martin Hlavacek from the Czech Republic, Renew, Kira Marie Peter-Hansen from Denmark, Greens, and Othmar Karas, from Austria, EPP, were appointed at First, Second, Third and Fourth Vice-Chair, respectively.
The EU Parliament voted to establish a permanent tax subcommittee to the Committee on Economic and Monetary Affairs in June. The subcommittee will be responsible for investigating issues surrounding “tax-related matters, and particularly the fight against tax fraud, tax evasion and tax avoidance, as well as financial transparency for taxation purposes”. The move to create a permanent tax subcommittee had been anticipated following several temporary inquiries into specific tax scandals being established in the past.
Mr Tang stated that, “The subcommittee will provide a permanent forum within which to address the complex topic of taxation. We will shed light on the practices that cannot bear the light of day, put pressure on those not implementing agreed legislation and push for a fair and sustainable European tax system”.
The selection of the remitted material has been prepared by:
Piergiorgio Valente/ Aleksandar Ivanovski/ Brodie McIntosh/ Filipa Correia