CFE’s Tax Top 5 – 20 February 2023

EU List of Non-Cooperative Jurisdictions for Ta Purposes Updated

The Council of the EU has added the jurisdictions of the British Virgin Islands, Costa Rica, Marshall Islands and Russia to the so-called “Blacklist”, the List of Non-Cooperative Jurisdictions for Taxation Purposes.

The British Virgin Islands were added to the list for not sufficiently complying with the OECD standard on exchange of information on request. Costa Rica was added for failing to fulfil its commitment to abolish or amend the harmful aspects of its foreign source income exemption regime. The Marshall Islands were added due to concerns over the jurisdiction having a zero or only nominal rate of corporate income tax and lacking in the enforcement of economic substance requirements. Russia was added for failing to address the harmful aspects of a special regime for international holding companies and following the Russian aggressive against Ukraine.

The following jurisdictions were recognised for fulfilling their commitments and were removed from Annex II: Barbados, Jamaica, North Macedonia and Uruguay. Hong Kong and Malaysia were given an extension to complete reforms concerning foreign source income exemption regimes for capital gains. Qatar was granted an extension due to constitutional reform constraints.

Aruba and Curaçao were featured in Annex II for undertaking to improve their Global Forum determinations as regards the automatic exchange of information on financial accounts. Belize and Israel also made this commitment criteria and Albania committed to amend or abolish its potentially harmful regime.

The following countries are on the revised Blacklist:

  • American Samoa
  • Anguilla
  • Bahamas
  • British Virgin Islands
  • Costa Rica
  • Fiji
  • Guam
  • Marshall Islands
  • Palau
  • Panama
  • Russia
  • Samoa
  • Trinidad and Tobago
  • Turks and Caicos Islands
  • US Virgin Islands
  • Vanuatu

The Blacklist is reviewed twice per year, and will next be reviewed in October 2023. 

ECHR Publishes Judgment in LuxLeaks Whistleblower Case

The European Court of Human Rights has published its judgment in the LuxLeaks Whistleblower Case. The Grand Chamber in the case of Halet v. Luxembourg (application no. 21884/18) held that there had been a violation by Luxembourg of Article 10 (freedom of expression) of the European Convention on Human Rights. 

As set out in the Press Release of the Court:

The case concerned the disclosure by Mr Halet, while he was employed by PwC, of confidential documents protected by professional secrecy, comprising 14 tax returns of multinational companies and two covering letters, obtained from his workplace. Following a dismissal by his employer, and at the close of criminal proceedings against him, Mr Halet was ordered by the Court of Appeal on appeal to pay a criminal fine of 1,000 euros, and to pay a symbolic sum of 1 euro in compensation for the non-pecuniary damage sustained by his employer. 

In view of its findings as to the importance, at both national and European level, of the public debate on the tax practices of multinational companies, to which the information disclosed by the applicant had made an essential contribution, the Court considered that the public interest in the disclosure of that information outweighed all of the detrimental effects arising from it. 

The Court held that Luxembourg was to pay the applicant 15,000 euros (EUR) in respect of non-pecuniary damage and EUR 40,000 in respect of costs and expenses.

OECD Public Consultation on Compliance & Tax Certainty of Global Minimum Tax – 16 March 2023

Last week, the OECD published comments received on the compliance and co-ordination aspects of the Pillar Two global minimum tax from the agreement of the OECD/G20 Inclusive Framework on BEPS (Inclusive Framework) to implement the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.

On 16 March 2023 at 12:30-15:30 CET, a public consultation meeting will now be held to discuss the published comments. Input received relating to the GloBE Information Return consultation and to the Tax Certainty for the GloBE Rules will be discussed during the public consultation meeting. Discussions will also cover how to preserve consistent and co-ordinated outcomes for MNEs while minimising compliance burdens and avoiding the risk of double taxation.

The meeting will take place online via Zoom/OECD TV and will be open to the public. Live interpretation will be available in English and French. Interested parties can register here

Register Now: CFE Forum – 20 April 2023 – “Towards a More Cohesive European Fiscal Union? Minimum Tax & VAT in the Digital Age”

Registration is open for CFE Tax Advisers Europe’s 2023 Forum, which will be held on 20 April 2023 in Brussels on the topic of “Towards a More Cohesive European Fiscal Union?  Minimum Tax & VAT in the Digital Age”. These two key European Commission projects mark another milestone in the deepening of EU fiscal integration. The Directive on Minimum Tax which implements Pillar 2 has been adopted and is now EU law. The directive relies on a degree of inter-nation fiscal equity, with minimum common standards for paying a ‘fair share’ of tax. Member states, tax administrations, companies and advisers all have questions about the implementation and the mechanism of operation. CFE will seek to clarify the main issues surrounding the practical application of the new directive as well as the issues posed by the lack of US implementation for taxpayers and wider.

On the other hand, similar developments have already been occurring in the indirect tax area. VAT, which as an area of competence for the EU, has evolved alongside the European project and is now entering the digital age. To discuss the VAT in the Digital Age EU package, CFE has invited a number of speakers to consider the policy side as well as the technical implications.

More details about the programme and line-up of speakers will be made available in due course. Register now here.

OECD Tax Talks – 27 February 2023

The latest in the OECD Tax Talks webinar series will be held online on Monday 27 February from 15:30-16:30 CET, in the format of a 45-minute presentation, followed by a 10-15 minute Q&A. The Tax Talks will focus on recent and upcoming developments in the OECD’s international tax agenda.

Registration is open via Zoom on the following link.

The selection of the remitted material has been prepared by:

Aleksandar Ivanovski & Brodie McIntosh