European Commission
Commission consults on CBAM reporting obligations in its transitional phase
European Commission (EC) published on 13 June a first call for feedback on the rules governing the implementation of the Carbon Border Adjustment Mechanism (CBAM) during its transitional phase, starting on 1 October 2023 and running until the end of 2025. The draft Implementing Regulation on which feedback is sought details the reporting obligations and information sought from EU importers of CBAM goods, and the provisional methodology for calculating embedded emissions released during the production process of CBAM goods. Stakeholders can provide feedback until 11 July.
Commission proposes a new statistical EU own resource
EC completed its proposal for the next generation of own resources on 20 June. The package includes a new temporary statistical own resource based on company profits. EC proposed to adjust the own resources proposals based on the Emissions Trading System (ETS) and Carbon Border Adjustment Mechanism (CBAM) compared to the original proposals from December 2021.
The new statistical own resource is supposed to be a temporary measure. It will be calculated as 0.5% of the notional EU company profit base, an indicator calculated by Eurostat based on the national accounts’ statistics.
It is not a tax on companies, nor does it increase companies’ compliance costs. It will be a national contribution paid by Member States based on the gross operating surplus for the sectors of financial and non-financial corporations.
It would eventually be replaced by a permanent own resource based on the upcoming Business in Europe: a framework for income taxation (BEFIT), scheduled for 12 September.
European Parliament
FISC hearing on achieving EU policy goals through tax incentives
FISC Committee held a public hearing on the role of tax incentives in achieving EU policy goals on 27 June. Guest speakers highlighted that while tax incentives could be the right policy option, such as in the case of market failures, a holistic approach should look at their impact on society. Moreover, business investment responds to factors other than just tax rates alone, such as whether the necessary skills or infrastructure is in place. The speakers underlined any tax incentives in the EU should seek to increase equality between countries and within countries, in addition to fostering the green transition.
ECON Committee adopts draft position on DAC 8
ECON Committee approved its draft report, as amended, on Amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC 8) with 43 votes in favour, 4 against and 5 abstentions on 28 June. MEP Rasmus Andresen (Greens-EFA/Germany) prepared the report.
The Council has already agreed on DAC 8, and the Parliament’s opinion is non-binding. However, it is needed before the Council agreement becomes EU law. A final vote in EP Plenary is scheduled for 11 September.
Council
Spanish Presidency publishes its priorities
Spain will take up the 6-month rotating Council Presidency from July. A website for the Presidency has been opened, including indications of Spain’s priorities.
On tax, the Spanish Presidency will advocate for establishing minimum and common standards on corporate taxation in all Member States and will fight tax evasion by large multinationals. This implies the Presidency will aim to progress on the withholding tax proposal (see above) and the Unshell directive, which reportedly aims to reach a political agreement by November.
Presidency trio programme published
Related to the above, it is customary for 3 consecutive Council Presidency holders to coordinate their programmes and priorities to ensure consistency and continuity. Spain, Belgium and Hungary hold the Presidencies for the next 18 months (6 months each), and on 20 June, published their joint programme of priorities.
On tax, the programme states that “the trio will take forward the transposition into EU law of the OECD framework on the reform of international taxation”. The trio will also prioritise efforts “to modernise and simplify the common VAT system by embracing digitalisation, and on work aimed at closing the VAT gap”.
