The European Parliament’s Committee on Economic and Monetary Affairs adopted two resolutions concerning taxation issues last week, one concerning the role of tax policy in times of crisis and the other concerning reform of corporate taxation rules.
The resolution concerning tax policy in times of crisis highlights issues surrounding excess profits made by multinationals due to times of crisis, and the fact that environmental taxation remains low in terms of total tax revenue in the EU. It calls for increased taxation of air and sea transport. The resolution also identifies issues posed to tax systems by cross-border working and the need to reduce tax fraud, avoidance and evasion, calling for solutions to issues surrounding these topics.
The resolution concerning reform of corporate taxation rules focuses on making recommendations on how Member States can ease the burdens on SMEs through the use of corporate tax rules. It recommends that Member States enact temporary measures to mitigate high energy costs and use revenues to provide relief to SMEs. Further, it calls on the Commission to evaluate action taken since 2011 in relation to corporate taxation with a focus on how best to ease administrative burdens on businesses. It also recommends the Commission propose further enhanced cooperation between tax authorities on best practices concerning the use of technology in improving tax related administrative procedures.
European Commission Publishes 2023 VAT Gap Report
The European Commission has published the 2023 VAT Gap Report, which shows that the EU VAT Gap decreased by around 38 Billion Euro, an unprecedented improvement as compared to previous years, with most Member States demonstrating a decrease in the VAT Gap. Some Member States demonstrated particularly notable reductions in the national VAT Gap figures, in particularly Poland and Italy. The smallest gaps observed were in the Netherlands, Finland, Spain and Estonia.
The report concludes that revenues lost through the VAT Gap were mainly due to VAT fraud, evasion and avoidance, non-fraudulent bankruptcies, miscalculations and financial insolvencies, but that targeted policy were having an impact, particularly those concerning digitalisation of tax systems, real-time reporting of transactions and e-invoicing.
The report is available here.
OECD Webinar on MLI to Implement Amount A of Pillar 1
On 26 October, the OECD held a webinar on the recently published text of the multilateral convention (MLC) related to implementation of Amount A of Pillar One. The webinar explored the key features of the MLI, in particular: applying Amount A rules; tax certainty framework for Amount A and related issues; and, removal and standstill of digital services taxes and relevant similar measures.
The webinar is available for replay on the OECD website here, and the slides from presentations made during the webinar are available here.
EU Commission & Parliament Co-host EU Tax Symposium in Brussels
The EU Commission and EU Parliament co-hosted the second EU Tax Symposium in Brussels on 24 and 25 October 2023, on the theme “The future of taxation in the EU: Challenges ahead & changes needed”.
Panel topics at the Symposium included: VAT in a digital world; the role of behavioural taxation; balancing incentives and redistribution: the future of Personal Income Taxation (PIT); the role of wealth taxation in the tax mix of tomorrow; does our tax mix age well: next generation taxation and structural changes; decision-making on taxation – combining the national, EU and international level; beyond the international agreement: how to further improve the business tax framework within the Single Market; the future of taxation in the EU: challenges ahead & changes needed; and, competitiveness vs fairness: what role can taxation play.
The panel discussions can be replayed via the EU Tax Symposium webpage.
OECD Updates FAQs on Model Reporting Rules for Digital Platforms
The OECD has updated the Model Reporting Rules for Digital Platforms: Frequently Asked Questions. The Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy were developed “in light of the rapid growth of the digital economy and in response to calls for a global reporting framework in respect of activities being facilitated by such platforms, in particular in the sharing and gig economy. Activities facilitated by platforms may not always be visible to tax authorities or self-reported by taxpayers. At the same time, the platform economy also permits increased access to information by tax administrations, as it brings activities previously carried out in the informal cash economy onto digital platforms. As such, the Model Reporting Rules for Digital Platforms are designed to help taxpayers in being compliant with their tax obligations, while ensuring a level-playing field with traditional businesses”.