FISC Committee publishes study on tax compliance costs for SMEs
The study aims to quantify and compare tax compliance costs burdening private businesses in the EU by reviewing the available empirical literature and data on SMEs. It was published on 23 February. The study discusses data, methodological challenges, and attempts to identify best-practice tax systems in Europe. It highlights differences in compliance costs met by firms of differing sizes, engaging or not in cross-border trade and for different tax types. The authors suggest a comprehensive tax reform at the pan-EU level, akin to CCCTB or BEFIT, would be the best way to alleviate compliance burdens.
European Parliament prepares work on its opinion of VAT in the digital age
MEP Olivier Chastel (RE/Belgium) has been appointed as the lead rapporteur, preparing a first draft of the Parliament’s opinion on the Commission proposal. The ‘supporting’ shadow rapporteurs include Lidia Pereira (EPP/Portugal), Aurore Lalucq (S&D/France) and Mikuláš Peksa (Greens-EFA/Czech Republic). An indicative ECON vote on the eventual draft opinion is currently set for 24 October.
In support of the MEPs’ work, the Parliament’s internal services have prepared and published a briefing paper on the Commission proposals. It provides a handy overview of the key provisions.
IESBA consults on new ethical principles for professional tax advisors
The International Ethics Standards Board for Accountants (IESBA) released the Exposure Draft on Proposed Revisions to the Code Addressing Tax Planning and Related Services for public comments on 17 February.
The proposed revisions respond to public interest concerns about tax avoidance, and the role played by consultants, including professional tax advisers, in light of revelations in recent years such as the Paradise and Pandora Papers. The proposals strengthen the ethical expectations for professional accountants in business and public practice when performing tax planning activities for employing organisations or providing tax planning services to clients, respectively.
The deadline for providing comments is 18 May.
Annual Report 2022: EPPO puts spotlight on revenue fraud, with VAT fraud on top
The Annual Report for the activities of the European Public Prosecutor’s Office (EPPO) in 2022 focuses on EU fraud affecting public revenue, particularly cross-border VAT fraud. By the end of 2022, the EPPO had 1117 active investigations with estimated damages of €14.1 billion, nearly half of which (47%) resulted from VAT fraud.
In 2022, the EPPO received and processed 3318 crime reports and opened 865 investigations. Judges granted the freezing of €359.1 million in EPPO investigations (compared to €147.3 million in 2021), representing more than seven times the organisation’s 2022 budget.
Bruno Le Maire hints at EU digital tax in case of Pillar 1 failure
French Economy and Finance Minister Bruno Le Maire said that the US, Saudi Arabia and India are blocking negotiations on taxing digital giants like Google, Apple, and Amazon, as reported by Euractiv on 20 February.
“The chances of success are slim,” stated Le Maire at a press briefing, “Today, things are blocked, notably by the United States, Saudi Arabia and India”.
Most notably, Le Maire re-iterated the French position that “if the G20 and OECD countries could not agree on the practical implementation of digital taxation, we would argue for its European implementation. I think we are there”.
The ministry’s services specified that “today, we are still working on a multilateral convention”. But “if there is a failure at the international level, a European solution could be envisaged”.