By Davide Anghileri, University of Lausanne
The Bulgarian presidency of the Council of the EU on January 30 described its priorities in the area of the EU taxation in a note sent to the Council of the EU’s High Level Working Party on Tax Issues.
The presidency states that tax certainty, international developments and competitiveness, digitalisation of economies, the overall tax burden on businesses, fair allocation of tax revenues, and the specific situation of multinational taxation will be taken in account in its work.
Mandatory disclosure, good governance
In the field of direct taxation, work will be based on the results of the OECD/G20 base erosion and profit shifting (BEPS), the presidency said.
In the short term, the Bulgarian presidency will try to reach agreement within the EU Member States on the mandatory disclosure rules inspired by Action 12 of the BEPS project with a view to introducing more effective disincentives for intermediaries who assist in tax evasion or avoidance schemes.
The need for agreement on the update of the existing EU standard provision on Good Governance in Tax Matters regarding third countries is another priority that will be addressed, the presidency said.
Digital economy, tax blacklist
In the medium term, the focus will be on a legislative proposal establishing rules at the EU level allowing taxation of profits generated by multinationals through the digital economy.
As expected, the presidency also intends to undertake follow-up work on the EU list of non-cooperative jurisdictions for tax purposes, with particular regards to updating the list based on new commitments from countries, monitoring the implementation of country commitments, and exploring further coordinated defensive measures in the tax area.
The Bulgarian presidency underlines the necessity of reaching EU agreement on establishing a minimum level of taxation in the Interest and Royalty Directive.
The presidency will also continue the work on the Common Corporate Tax Base on the technical level, trying to achieve as much progress as possible, the note states.
Excise duties, financial services
Further, the presidency intends to continue debate on the improving existing regulation regarding the excise duties sector for national revenues, focusing on the structure and rates of excise duty applied to manufactured tobacco, the harmonization of the structures of excise duties on alcohol and alcoholic beverages, and the general arrangements for excise duty.
Discussions will also be held on of indirect taxation of financial services, the presidency said.
The Bulgarian presidency said its aim is to promote investment, to ensure sustainable economic growth and fair competition within the Single Market by fair and efficient taxation of corporate profits generated in the EU, prevent aggressive tax planning, and increase tax transparency.
In the field of VAT, in the short term, work will be focused on the fight against VAT fraud; the simplification of administrative burden for citizens, businesses and administration; the strengthening of IT systems, the improvement of administrative co-operation; and new business models (digital economy, globalisation of trade, etc.).
The Bulgarian presidency seeks, as well, to adopt the minimum standard rate among the EU countries at 15 percent.
The medium-term work regarding VAT will be focused on a report on the prolongation of the sectorial reverse charge, on proposals for VAT simplification for SMEs, and on a proposal on VAT rates in EU.
The presidency said its priority is to achieve a single European VAT area with regard to cross-border trade in goods among the Member States and to promote the use of effective tools for integrated VAT management, with enhanced administrative cooperation among Member States’ tax administrations.