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News from Accountancy Europe – July 2019

By July 23, 2019July 10th, 2021No Comments

Johan’s latest contribution to Tax Journal on what’s been going on recently in Brussels…

EU watch: member states pick up the pace – Johan’s latest contribution to Tax Journal on what’s been going on recently in Brussels: 

European Commission

Commission proposes to grant Czechia the right to apply temporary generalised reverse charge mechanism

The European Commission has proposed to grant Czechia the permission to apply a generalised reverse charge mechanism (GRCM), as a derogation from the VAT Directive.

The Commission assesses that Czechia fulfils the criteria for applying a GRCM that were established in a relevant amendment to the VAT Directive. This amendment was approved by the Council on 20 December 2018.

The other EU member states will now have to approve Czechia’s request by unanimity.

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Commission publishes latest taxation trends report: environmental tax revenues remain stable

The European Commission has published its latest Taxation trends report. The report provides a set of interesting key statistics and developments from the EU’s tax system, such as:

  • Environmental and energy taxes remained stable in the EU over last decade, with revenue from them representing 2,4% of GDP
  • In 2017 EU tax revenues were 39% of GDP – an almost 2% increase from 2009
  • Statutory and effective corporate tax rates have decreased since 2005 but revenues are in slow increase since 2009
  • Labour taxes increased slightly 2012-2017

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Dutch request the Commission to legislate on aviation taxes

On 20-21 June, the Netherlands organised a conference at The Hague to build support for a common European framework for aviation taxes. As a follow-up, the Dutch government reportedly now intends to prepare a letter to the European Commission, calling on it to put forward a legislative proposal on the topic.

The Dutch will attempt to get as many other EU member states as possible to co-sign its letter. It can expect support, at least, from Luxembourg, France and Belgium.

Any subsequent proposal from the European Commission will have to wait until the new Commission starts its term in November 2019.

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Finnish Presidency of the Council publishes its priorities for the next six months

On 1 July Finland took up the rotating Council presidency and announced its policy priorities for the next six months. The programme includes a few tax priorities too.

In a generically worded work programme, the Finnish presidency commits to continue working on digital tax reform at the OECD level (Finland was one of the few EU countries opposed to unilateral EU work on this), and work against ‘harmful tax competition’, tax evasion and avoidance. Moreover, Finnish officials have stated separately that they would seek to find an agreement on the Commission proposal on VAT simplifications for SMEs.

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Court of Justice of the EU – Ruling

Case T‑20/17: Court annuls Commission decision that claimed Hungarian advertisement tax to be incompatible with EU law. Read the analysis.

C‑316/18: Input VAT deduction and management costs of an endowment fund