2023-12-08-KPMG_s_EU_Tax_Centre-Euro_Tax_Flash_from_KPMG_s_EU_Tax_Centre_7页_474kb

ECOFIN Meeting Summary: Direct Tax and Code of Conduct Updates December 8, 2023

Background

The Economic and Financial Affairs Council (ECOFIN Council) concluded its Spanish Presidency term with a December 8, 2023 meeting. Key priorities under the presidency included advocating for corporate tax standards, fighting tax evasion, and advancing direct tax measures. The council approved the ECOFIN report on direct taxes and a progress report on new own resources.

ECOFIN Report: Direct Tax Progress

• Unshell Directive: Debates ongoing on shell entity misuse; discussions on a two-stage proposal with concerns raised by member states, leading to further amendments needed.
• FASTER Directive: High priority for facilitating secure withholding tax reliefs; four compromise texts reviewed with progress, but technical work continues.
• Other initiatives: Analyzed BEFIT, transfer pricing, and head office tax system proposals via working groups; automatic tax information exchange with non-EU jurisdictions continues with personal data protection focus.

Code of Conduct Group (CoCG) Work

• Tax Measure Reviews: Croatia's investment act pending; Ireland and Poland's measures not considered harmful, but monitored. Standstill reviews paused or terminated for certain tax incentives that don't significantly affect business location.
• EU Listing: Lists of non-cooperative jurisdictions updated; Botswana and Dominica recommended for removal due to compliance; new criteria and monitoring criteria to be reviewed for future updates. Extension to Brunei, Kuwait, and New Zealand pending.
• Defensive Measures: Jurisdictions failing tax good governance under review; plans to monitor implementation of defensive measures continued.

New Own Resources Progress

• Spanish Presidency presented a report on revised own resources package, focusing on corporate profits-based levy and carbon border adjustment mechanism (CBAM). Member states showed skepticism on new statistical own resource but positive attitude toward CBAM contributions; some supportive of EU emission trading developments.

Next Steps

• Belgium takes over presidency in 2024; priorities for working groups and own resources discussions remain uncertain.
• CoCG will assess general EU tax measures from January 2024, starting with tax incentives and breaks. Pending agreements on Unshell and other initiatives risk delays in broader tax reforms.

Conclusions

The Spanish Presidency concluded with mixed progress on direct tax directives and own resources, highlighting the need for continued collaboration and technical work before Belgian Presidency begins.