2022-03-01-KPMG_Global-E-News_from_KPMG_s_EU_Tax_Centre_13页_527kb

Latest CJEU, EFTA and ECHR

• CJEU on Withholding Tax on Fictitious Interest: Refers to settled case-law: Anti-abuse provision assessing tax on 'fictitious interest' for interest-free loans does not violate EU Interest/Royalties or Parent-Subsidiary Directives. The restriction aims to combat tax avoidance/public interest, though the judgment nuances the Advocate General's proportionality concerns regarding irrebuttable presumptions.
• CJEU on EU Law Primacy: Confirms EU law primacy over domestic law, even constitutional court decisions, preventing lower courts from assessing EU law compatibility after a constitutional court has upheld domestic law. The Court reiterates that national courts must review EU law compliance, and members states must allow preliminary rulings. Dismisses Romanian Constitutional Court's claim that EU law infringes national identity in interpreting secondary law.

Infringement Procedures and CJEU Referrals

• EU Commission Closes Infringement Proceedings Against France: France amended financial legislation (effective 2021) exempting certain EU/EEA investment funds from non-resident capital gains tax, addressing discrimination. Compliance required for foreign funds investing in France.
• Referral Court & EU Law: Court ruled that national rules preventing lower courts from assessing EU law compatibility following a constitutional court's favorable ruling violate EU law's primacy.

EU Institutions

• COUNCIL: Updated EU "grey list" (non-cooperative jurisdictions for tax evasion) adding Bahamas, Bermuda, Israel, Russia, Tunisia, etc. Current list includes 25 jurisdictions.
• PARLIAMENT: Adopted report urging tax policy harmonization, reducing SME compliance costs, reviewing debt-equity bias, investigating low effective tax rates, and combating R&D incentive abuse. Cites need for stronger peer review.

OECD and other International Institutions

• OECD Progress on BEPS Two-Pillar Solution:
  • Released Draft Model Rules for Nexus/Revenue Sourcing and Tax Base Determinations (Amount A) for public comment, key deadlines ongoing (e.g., late Feb 2022 for Tax Base feedback). Implementation timeline includes MLI talks (target mid-2022 agreement).
  • Pillar Two: Commentaries and implementation frameworks under development (likely early 2022 consultations).
• OECD Report Endorsed by G20: G20 Finance Ministers endorsed OECD report, calling for work on supporting developing countries, explicit carbon pricing initiative, automatic cryptoasset information exchange, and Bahrain ratifying the MLI.

Local Law and Regulations

• Specific Country Updates: Country-specific summaries detailing corporate tax reforms (Austria: rate changes; Italy: patent box; San Marino: investment relief; Seychelles: income tax rates) or procedural/policy updates (Belgium: refundable tax credit; Germany: DCL rule interpretation; SA: budget speech commitment to OECD Pillar Two & GloBE; SP: favourable ruling on "beneficial owner").

Local Courts

• France, Court of Appeal: Confirmed French withholding tax exemption does not negate the right to foreign tax credit claim on exempt dividends, preserving potential offset for the deemed 5% non-deductible addition.
• Italy, Supreme Court/Sangiacomo: Extended withholding tax exemptions (formerly only for Italian UCITS/SICAVs) to foreign SICAVs and pension funds regarding Italian dividends. Allows tax return for dividends paid before the reform.

KPMG Insights

• BEPS Pillar II: New developments drive tax leadership considerations; prepared webcast (March 9, 2022).
• Tax Defensiveness Measures: Monitoring tax defensive/administrative actions by member states targeting non-cooperative countries.
• UAE Corporate Tax: New federal system effective 2023.
• Restructuring: Tax/Legal considerations webcast (Jan 25, 2022).
• Tax Transparency: ESG focus, tax reporting.
• EU Green Deal: Resources compiled by KPMG on "Fit for 55" package.