EU tax package expected on 7 June
The next big date for EU tax policy enthusiasts is 7 June, when the European Commission (EC) plans to launch two new legislative proposals. The first is an initiative to tackle the provision of ‘aggressive tax planning’ by so-called “tax enablers” (SAFE initiative). The second initiative aims to set up a pan-European withholding tax framework. The date, 7 June, is tentative and may yet change.
Two new VAT initiatives in the pipeline
Following the EC’s VAT in the digital age proposal from the end of 2022, at least two additional VAT initiatives should be expected in 2023.
EC is planning a public consultation on extending the Directive on administrative cooperation (DAC) for VAT in the first quarter of 2023. The plan is to enable tax administrations better fight against VAT fraud. A legislative proposal would follow in the fourth quarter of 2023.
EC is also working on a VAT package for travel and tourism. A public consultation is expected imminently, and a legislative proposal for the fourth quarter of 2023.
ECON hearing: Swedish Presidency aims for DAC 8 deal by the end of its term
ECON Committee hosted Elisabeth Svantesson, ECOFIN President and Minister for Finance of Sweden, on 24 January. The minister presented Sweden’s priorities for the country’s 6-month Presidency (see article below), including taxation.
The minister listed the main tax priorities. One focus is the Unshell Directive. The Council made progress on the technical analysis of the proposal last year and intended to continue that work. On VAT, they aim to take the newly presented VAT in the digital age package forward. Sweden considers this proposal crucial as the EU is estimated to lose EUR 93 billion annually, a significant part of it due to VAT fraud.
Another vital file concerns DAC 8. This will be an essential step to stop tax evasion. Svantesson hopes they could conclude negotiations during their term by July.
Council reaches agreement on CBAM and minimum taxation
EU member states agreed to implement the minimum taxation (Pillar 2) Directive at the EU level. The ambassadors of EU member states decided on 12 December to advise the Council to adopt the Pillar 2 directive. A written procedure for the formal adoption was concluded soon after. With the Parliament’s non-binding opinion finalised, EC added the agreed Directive to the EU Official Journal on 22 December.
Moreover, negotiators of the Council and the European Parliament reached an agreement of a provisional and conditional nature on the Carbon Border Adjustment Mechanism (CBAM) on 13 December. The agreement must be confirmed by ambassadors of the EU member states and by the European Parliament and adopted by both institutions before it is final. Parliament’s Plenary vote is expected in the week of 17 April.
Sweden takes over rotating 6-month Council presidency
Sweden took over the Council’s 6-month rotating Presidency in January 2023 and will preside until July. For taxation, the Presidency’s priorities include:
- continue discussions on energy tax Directive (ETD)
- continue work on VAT in the digital age
- progress on EU list of non-cooperative jurisdictions advance the work on tax transparency