EU BEPS: Presidency of the Council roadmap on future work
On 19 February, the Dutch Presidency of the Council of the EU circulated to EU Member States a Roadmap on EU BEPS, setting out future work in the Council during the coming months in the field of Base Erosion and Profit Shifting (BEPS) at EU level. Please click here to view the roadmap, and a summary of the short-term and medium-term work outlined by the Presidency below.
1 Interest and Royalties Directive (IRD)
- The Dutch Presidency intends to take stock of discussions taken from the Latvian and Luxembourg Presidencies, on the possible inclusion of a Minimum Effective Taxation (MET) clause in the IRD and to use the result as a basis for a Presidency Compromise, with a view to a political agreement on this file. The work on the file will build on the two alternatives submitted under the Luxembourg Presidency: MET rate as sole criterion or MET rate combined with an economic activity test.
- A possible inclusion or reference to the OECD modified NEXUS approach in the IRD could also be explored.
2 Anti-tax avoidance Directive
- The Dutch Presidency will give high priority to the anti-tax avoidance directive, with a view to reaching a political agreement by the end of its term.
3 Country-by-country reporting (CBCR) on transfer pricing agreements
- The Dutch Presidency will give high priority to this file, but considerable work on it was already done in the OECD. The Presidency aims at reaching an early political agreement and adopting the legislative act by the end of its term, in June.
4 Reform of the Code of Conduct Group
- It would be difficult to discuss the revision of the mandate of the Code of Conduct Group in parallel to discussions on the inclusion of a MET clause in the IRD.
- As a first step, the Dutch Presidency will however discuss how to improve the Group’s political visibility and transparency. The Presidency intends to put forward concrete proposals in this area.
- Then, it will start discussions on a revision to the mandate.
5 Hybrid mismatches
- The Presidency intends to reach an agreement by the end of its term on guidance and explanatory notes on Hybrid Permanent Establishment Mismatches in third countries.
6 Good governance in third countries
- An appropriate way forward will be discussed in the Council.
7 OECD BEPS issues in Double Taxation Agreements
- An exchange of views in the Council is foreseen.
1 Transfer pricing
- The Code of Conduct Group will start work this following OECD BEPS conclusions on Actions 8-9-10.
2 Disclosure of aggressive tax planning
- The Code of Conduct Group will assess the opportunity of developing EU guidance for implementing OECD BEPS conclusions on Action 12 (disclosure of aggressive tax planning), notably with a view to facilitate exchange of such information between tax authorities.
3 Beneficial ownership of non-transparency entities
- The outcome of the Fourth Anti-Money Laundering Directive negotiations could be discussed from a tax perspective, also taking into account the Action Plan on the fight against terrorism financing adopted by the Commission on 2 February 2016.
4 Conditions and rules for the issuance of tax rulings
- According to its Work Package 2015 the Code of Conduct Group will develop a set of guidelines on the conditions and rules for the issuance of tax rulings by Member States.
On 28 January 2016 the European Commission published the Anti-Tax Avoidance Package, which included:
- Legislative proposal for a Directive laying down rules against tax avoidance practices that directly affect the functioning of the internal market ("Anti-BEPS Directive")
- Legislative proposal for a Directive amending directive 2011/16 as regards automatic exchange of information in the field of taxation
- Communication on an external strategy for effective taxation
The Presidency of the Council of the European Union rotates among the EU member states every 6 months. The presidency is responsible for driving forward the Council's work on EU legislation, ensuring the continuity of the EU agenda, orderly legislative processes and cooperation among member states.
At the moment, the Presidency is held by the Netherlands (January-June 2016), which will be followed by Slovakia (July-December 2016).