The European Parliament’s Economic and Monetary Committee has given its backing to new European Commission proposals that would bring the EU closer to the creation of a harmonised corporate tax system. Continue reading “MEPS Back EU Corporate Tax Plan Proposals”
In a State visit to Bulgaria, the President of Malta Marie Louise Coleiro Preca underlined the importance of Malta and Bulgaria as strategic bridges in the Mediterranean Sea and the Western Balkans respectively for both culture and economy.
While delivering the closing address of the Bulgarian-Maltese Business Forum organised in Sofia, Bulgaria for Maltese and Bulgarian business leaders to mingle, the President emphasised the political will of the Maltese Government to explore opportunities in trade, economical collaboration, and tourism growth, amongst others, and urged both countries to seek such opportunities in the best interests of their people. The President encouraged the stake holders to keep up the “excellent momentum” achieved during the State visit which included meetings with relevant collaborators from various sectors.
Malta has moved a step closer to introducing legislation to regulate the use of virtual currencies such as bitcoin, following the publication by the Malta Financial Services Authority (MFSA) of a regulatory framework covering collective investment schemes and the risks associated with virtual currencies. Continue reading “Malta Moves to Regulate Virtual Currencies”
The European Commission has recently issued a legislative proposal for changes in the current VAT regime that will be submitted to the European Parliament and European Economic and Social Committee for consultation and the Council for adoption. The proposed changes aim to a simpler, more flexible and more attractive to small companies, tax environment and towards the creation of a single EU VAT area.
The proposed VAT system is based on general rules in contrast to a system of exceptions that is implemented at present.
The new rules provide for a standard VAT rate of minimum 15% while giving the flexibility to Member States to put in place:
In addition, the present complex list of goods and services to which reduced rates can be applied would be replaced by a list of products to which reduced VAT rates cannot be applied. Among others the new list would contain weapons, alcoholic beverages, tobacco, gambling, smartphones and fuel.
In relation to SMEs, the proposed rules would provide for:
In addition, the exemption from VAT which till now has been available only to domestic players will apply to businesses with cross boarder activity as well under the requirement that the turnover in Country of consumption is below the national threshold in that Country and that the annual turnover in the EU is below € 100,000.
The proposed measures are expected to reduce cross-border VAT fraud by around 80% and the overall VAT compliance costs by up to 18% per year.
On 9th January, the first high-level meeting of the EU Clean Energy Industrial Competitiveness and Innovation Forum took place in Brussels.
The EU announced the ‘Clean Energy for All Europeans’ package, in terms of the Commission’s initiative to help EU industry take advantage of the growth opportunities arising as part of the clean energy transition. More than 20 CEOs and industry leaders, including Small and Medium Enterprises, as well as representatives from international organizations, took part in the dialogue that focused on how to reinforce the competitiveness of the EU renewable energy industry’s value chain as well as on the role of research, innovation and trade policy.
As of 1st January 2018 the provisions of Directive on Administrative Cooperation (Directive 2011/16/EU) entered into force, according to which national tax authorities have direct access to information on beneficial owners of companies, trusts and other entities, as well as customer due diligence records of companies. It is anticipated that access to these data collected under anti-money laundering legislation will enable authorities to react quickly and efficiently to cases of tax evasion and avoidance.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said on the issue: “We want to give tax authorities crucial information on the individuals behind any company or trust. This is essential for them to be able to identify and clamp down on tax evaders. To do this, tax authorities will now have access to anti-money laundering information”.
As of 1st January 2018, according to EU Regulation on monitoring, reporting and verification of carbon dioxide emissions from maritime transport (Regulation No. 757/2015 as amended) ships over 5000 gross tonnage (“relevant ships”), regardless of their flag and subject to a few exclusions (warships, naval auxiliaries, fish catching etc.), will become subject to monitoring and reporting requirements on carbon dioxide emissions (CO2), fuel consumption and cargo carried within all ports and for any voyages to or from a port under the jurisdiction of a Member State. It is estimated that Relevant Ships account for 55% of all ships calling into EU ports and 90% of related emissions.
The requirements are part of a staged process to understand GHG reduction potential prior to possible pricing of those emissions and as such this EU Regulation is considered as a key measure designed to understand how to make shipping ‘greener’.
More specifically by 1st January 2018 companies will be required to monitor emissions for each Relevant Ship on a per-voyage and aggregate on an annual basis by applying the appropriate method chosen in their monitoring plan that should have been submitted to independent verifiers by 31st August 2017.
Subsequently from 2019 and by 30th April of each year, companies will be required to submit to the Commission and to the authorities of the flag states concerned, an independently verified emissions report, during the annual reporting period for each relevant ship under their responsibility.
Finally from 30th June 2019 all relevant ships having performed activities in the previous reporting period and visiting EU ports, must carry on board a valid Document of Compliance (“DoC”), issued by an accredited EU Regulation shipping verifier, that might be subject to inspections by Member States’ authorities.
Following an in-depth examination of the Maltese tonnage tax scheme, the EU Commission has conditionally approved under EU State Aid rules the Maltese tonnage tax scheme for a period of 10 years. The scheme will ensure a level playing field between Maltese and other European shipping companies, and will encourage ship registration in Europe. Malta being the largest flag in Europe, has always been committed to high standards and uniform level of playing field in Europe.
The “Tony de Brum” declaration, signed by 35 countries including among others the UK, France, Denmark, Germany, Canada, Malta and Greece in terms of the first One Planet Summit, aimed at adopting the first strategy for reducing greenhouse gas emissions from ships by 2018 and a revised strategy by 2023. These currently account for 3% of global CO2 emissions but they could rise 250% by 2050 if no targeted action is taken.
This Summit was called for by the President of the Republic of France and jointly convened by the UN and World Bank, following the United States’ announcement that it was withdrawing from the Paris agreement.
The signing ceremony was held on 12th December 2017 and the signatories urged for an ambitious CO2 reduction target to be set, compatible with that determined by the Paris Agreement, including a short-term cap on emissions, the ultimate objective being zero-emissions in the second half of the century.
Late last week, the Finance Ministers of EU member states agreed on a list of 17 countries which according to the EU have failed to meet agreed tax good governance standards. These countries are all non-EU member states and are the following: American Samoa, Bahrain, Barbados, Grenada, Guam, Korea (Republic of), Macao SAR, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia, and the United Arab Emirates. Most of these jurisdictions have preferential tax regimes, or do not abide by minimum EU standards and standards set by the Global Forum on Transparency and Exchange of Information for Tax Purposes amongst others.
The Council in its conclusions also provides for 47 other jurisdictions which have committed to addressing certain deficiencies in their tax regimes and to meet the required criteria following communication with the EU. This list includes jurisdictions such as Turkey, Hong Kong, Jordan and Isle of Man.
This list has been issued with the aim of having a dissuasive effect which encourages jurisdictions to improve their tax systems in order to be able to be taken off the list. At the same time, the EU also aims to create efficient protective mechanisms to fight the erosion of Member States’ tax bases through tax fraud, evasion and avoidance as a result of the use of such third country tax systems, as the Panama Papers have shown.
Finally, the Council also encourages Member States to take on administrative defensive tax measures in their own jurisdiction such as reinforced monitoring of certain transactions or increases audit risks for taxpayers benefiting from such regimes or structures involving such regimes.
Clearly, it remains to be seen how, and if, such list will have any effect in practice. However, it is an additional step that the EU has taken in order to promote tax transparency and fight tax avoidance and abuse.
