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The Council of the EU, in composition of EU’s finance ministers (ECOFIN), approved the European Commission proposal on a directive establishing faster withholding tax relief (WHT) procedures and common tax residency certificate (eTRC) from 1 January 2030. CFE Tax Advisers Europe welcomed this initiative of the European Commission, and in its representations urged the EU to be bolder and envisage a more ambitious implementation timeline. 

Currently, many EU Member states tax dividends and interest paid to foreign investors, resulting in double taxation. Double tax treaties aim to resolve this, but complicated relief procedures make the process lengthy, costly, and susceptible to fraud. The Directive aims to reduce administrative burden and facilitate the relief procedure by establishing: 

1. Common Tax Residence Certificate (eTRC): EU digital certificate for fast-track double tax relief;
2. Fast-Track Procedures with relief-at-source (tax applied at payment) or quick refund within a set deadline.  The procedure becomes mandatory for publicly traded shares, and optional for bonds, with current procedures retained under certain conditions;
3. Additional provisions: Anti-fraud measures, provisions for indirect investments, due diligence by certified financial intermediaries, financial intermediaries must report transactions, European portal will host national registers, direct and indirect reporting and penalties for non-compliance.

Speaking after the ECOFIN, Vincent Van Peteghem, Deputy PM and minister of finance of Belgium said: “Aligning our tax relief procedures is essential if we want to improve the functioning of the capital markets union. I’m glad we have found an agreement on this important proposal, which will also help to fight tax fraud much more efficiently. It will make investing in other countries easier and hopefully encourage retail investors in particular to invest on European financial markets, which will eventually benefit the whole economy.”

The European Parliament will be consulted again on the agreed text due to changes made by Council after Parliament’s first consultation, and the agreed text will then be translated and published in the Official Journal of the European Union. Member states have a transposition deadline of 31 December 2028, but the national rules will have to become applicable from 1 January 2030. 

The Council did not reach an agreement on ViDA, the proposals for reforming VAT fit for the digital age and discussions on the file will continue.  

U.S. Will Not Support Global Minimum Wealth Tax: Secretary of Treasury

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The proposals for 2% minimum tax on wealthiest individuals does not have the support of the United States government, U.S. Secretary of Treasury Janet Yellen said for The Wall Street Journal on Monday. “The notion of some common global arrangement for taxing billionaires with proceeds redistributed in some way — we’re not supportive of a process to try to achieve that. That’s something we can’t sign on to.”, Yellen said speaking about the G20 plan which has acquired support from other global players such as Brazil and France. The plan was floated by the EU-financed Tax Observatory and its director Gabriel Zucman, who proposed 2% annual tax applied to the wealth of circa 3,000 billionaires to generated $250 billion in revenue each year. 

“Although there is a lot that can be done by countries acting individually, the best way to address this regressivity is by creating a common minimum standard through international coordination. This is because the main obstacle to taxing the very rich in practice is the risk that they may relocate to low-tax places. This international competition has exerted considerable pressure on the design of tax systems globally. But with international coordination, a binding floor can be put to the tax rates of the ultra-wealthy.”, Zucman said speaking at G20. 

The proposed measures on establishing global minimum wealth tax have acquired the support from France and the International Monetary Fund (IMF). Speaking separately, French Finance Minister Bruno Lemaire said the proposals have “the absolute support of France”, whereas IMF’s Managing Director Kristalina Georgieva said: “In most countries, the rich pay fewer taxes than the middle class and even the poor. Our first choice is to close the loopholes and prevent tax evasion. We call on the international community to implement agreements that allow sharing of tax information.”

The Belgian presidency of the EU and the European Commission informed EU finance ministers about the outcome of the G20 finance ministers’ and central bank governors’ meeting that took place on 17-18 April 2024 and the spring meetings of the International Monetary Fund (IMF) in Washington DC.  

CFE – Accountancy Europe Members’ Only Webinar: New EU AML Rules – What Changes For Practitioners?

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In 2021 the European Commission put forward an ambitious package of legislative proposals to strengthen the EU’s Anti-Money Laundering (AML) rules – “the AML Package”. After more than two years of negotiations, the European Parliament adopted the AML package on 24 April 2024. Accountants, auditors and tax advisers play an important role in keeping European citizens safe from money laundering and terrorist financing. The new AML rules will bring significant changes for these professions.

CFE Tax Advisers Europe and Accountancy Europe have partnered to help member bodies, tax advisers, accountants and auditors better understand the changes. We will address how the new requirements will affect practitioners’ day-to-day work, why it’s important to start preparing now and where to start. This is an invitation-only webinar for CFE Tax Advisers Europe and Accountancy Europe Member organisations and their members. 

The discussion will take the form of a virtual fireside chat between Angela Foyle, Accountancy Europe AML Working Party Chair, Aleksandra Vasilić, Director AML Office, EY, and Rolf Declerck, President of the Commission on Quality Performance Review, Belgian Institute of Tax Advisors and Accountants, CFE Tax Advisers Europe.

Registration for Members of CFE and Accountancy Europe is now open via the following link. 

European Elections: 6 – 9 June 2024 #UseYourVote