Bulgarian Presidency Releases Tax Policy Roadmap

The European Union Presidency of Bulgaria released its roadmap for the coming months on tax issues. Taking into account the latest development in tax practice and governmental negotiations, the roadmap set future work regarding direct taxation and indirect taxation, with both short-term and medium-term proposals.

Direct Taxation: Governance and Cooperation, Digital Economy, EU Blacklist

In the shorter term, the Presidency will pay more attention to reaching an agreement on the several EU-BEPS work items. First, an early agreement on the proposal to amend the Directive 2011/16/EU is supposed to be achieved, which introduces mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements ("DAC 6"). Second, the 'Good Governance in Tax Matters' clause in the EU agreements with third countries is in process, and agreement on some key elements concerned are sought by the Presidency. Third, a guidance note on the interpretation of the third criterion of the Code of Conduct is to be explored, as well as possible ways forward as regards the revision of the mandate of the Code of Conduct (gateway criterion).

In the medium term, the Presidency is willing to undertake work on: first, proposing a legislative draft regarding the taxation of digital economy and allowing member states to tax profits generated by multinationals without physical presence within the Union; second, following up on the EU list of non-cooperative jurisdictions for tax purposes; third, amending the Interest and Royalty Directive by adding an anti-abuse rule similar to the one inserted in the Parent-Subsidiary Directive; fourth, renewing the proposal for Common (Consolidated) Corporate Tax Base Directive.

Indirect Taxation: VAT, Excise Tax and Financial Transaction Tax

As regards Value Added Tax, the Council during the Bulgarian Presidency will be carrying out their work in accordance with the conclusions reached during the ECONFIN meeting in 2016 May and 2017 November. Particular attention will be given to the value the EU can add in the most relevant fields, such as combatting VAT fraud, simplification of administrative burden for citizens, businesses and administration, strengthening of IT systems, improving administrative co-operation, new business models (digital economy, globalisation of trade, etc.).

As regards other indirect tax, the Presidency intends to promote the negotiation and enhance cooperation on financial transaction tax. In addition, the existing excise regulation will continue to be discussed for further improvements, with a new round of debates on several legislative proposals and reports from the European Commission launching.

Source: EU Council

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