CFE’s Tax Top 5 – 29 April 2024

BRUSSELS | 29 APRIL 2024

Letta Report on the Future of the EU Single Market

The long-awaited Letta Report, “Much More Than a Market: Speed, Security, Solidarity: Empowering the Single Market to deliver a sustainable future and prosperity for all EU Citizens” has been published. Enrico Letta, former Italian Prime Minister, was mandated by the EU Council and the Commission to prepare a report examining and making recommendations for the future of the Single Market. 

In relation to addressing tax issues which cause fragmentation within the Single Market, the report emphasises the need for a harmonised tax framework to promote free movement of goods, services, and workers. It highlights legislative proposals aimed at addressing tax barriers and fostering systemic reforms to create a level playing field and discourage harmful tax competition. The report also calls for simplifying tax compliance, particularly for SMEs, and lifting tax barriers in cross-border investments. It discusses the slow progress in harmonising indirect taxation, the need for VAT reform, and tackling fraud. Additionally, it addresses excise taxes and the importance of combating aggressive tax planning, avoidance, and evasion. The EU’s role in implementing OECD tax reforms and advocating for a fairer global tax system is emphasised, as well as the importance of unified action to defend common interests.

The full report can be accessed here.

EU Elections – 6 – 9 June 2024 – #UseYourVote

CFE has concluded a Partnership Agreement with the European Parliament to promote the 2024 EU elections scheduled for 6 – 9 June 2024, and EU citizens with a right to vote can directly elect Members of the European Parliament from their constituencies. 

In a few weeks time the European Union will witness the world’s second-largest democratic exercise as citizens cast their votes in the 2024 European Elections. This moment is an opportunity for every citizen to shape the future of Europe, while also helping uphold democracy – because the more people vote the stronger democracy becomes.

Today, the EU Parliament has launched its campaign to encourage voter turnout. The emotional campaign is centred around a four minute video featuring senior Europeans who have witnessed first-hand the transformative power of democracy in their lives. These exceptional individuals wanted to pass on their personal stories – whether they lived through times of oppression or experienced the fragility of democracy – to their grandchildren and the next generation more widely. Together, their testimonies paint a story of how voting is not something we should take for granted and urge the viewer to #UseYourVote. Or others will decide for you. 

More information on the voting process is available on the EU Elections webpage. 

OECD Publishes Updated GloBE Commentary

The OECD has published an updated Consolidated Commentary to the Global Anti-Base Erosion Model Rules. The Commentary explains the intended outcomes under the GloBE Rules, clarifies the meaning of certain terms and illustrates the application of the rules to certain fact patterns.

This Consolidated Commentary incorporates Agreed Administrative Guidance that has been released by the Inclusive Framework since March 2022 up until December 2023. It provides tax administrations and taxpayers with guidance on the interpretation and application of the GloBE Rules in order to promote a consistent and common interpretation and application of those that will facilitate coordinated outcomes for both tax administrations and MNE Groups.

The original Commentary Commentary and Illustrative Examples setting out guidance on the operation and intended outcomes of the Global Anti-Base Erosion Rules was published in 2022, within the framework of the OECD’s BEPS Project which devised the two-pillar solution to reform the international tax framework in response to the challenges of digitalisation of the economy.

EU Commission April Infringement Package

As part of its April 2024 infringement package, the European Commission has issued letters of formal notice to Ireland and France, and a second letter of formal notice to Latvia for failing to correctly transpose the 4th and 5th Anti-Money Laundering Directives (4th AML Directive as amended by the 5th AML Directive)

The Commission identified issues with France in its conformity for not ensuring the completeness of the national Beneficial Ownership register as it did not contain certain legal entities. Ireland was found not to have guaranteed the adequacy and completeness of the information held in the Beneficial Ownership register of trusts as well as regards the accessibility of its information. Latvia was found to have incorrectly transposed the functioning of its Financial Intelligence Unit (FIU) by limiting its obligation to exchange information with other FIUs.

The Member States have two months to respond and address the issues with transposition of the 4th and 5th Anti-Money Laundering Directives. 

Activity Report of EU Parliament’s Subcommittee on Tax Matters

The EU Parliament’s Subcommittee on Tax Matters has issued an Activity Report for the period 2020 – 2024. The Subcommittee on Tax Matters (FISC) was established in September 2020 to investigate and address tax related matters for the Committee on Economic and Monetary Affairs (ECON), with a focus on tax fraud, tax evasion and tax avoidance, as well as financial transparency for taxation purposes. The report provides an overview of all hearings, missions and exchanges of view which took place within the period, as well as all reports adopted. It is intended for Member of Parliament, stakeholder and citizens looking for a comprehensive picture of the priorities and activities of the FISC Subcommittee.

The selection of the remitted material has been prepared by:
Dr Aleksandar Ivanovski & Brodie McIntosh