Malta and EU Tax and Compliance Policy Bulletin 89

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Malta and EU Tax and Compliance Policy Bulletin 89

David Marinelli

October 2, 2023

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Common EU list of third country jurisdictions for tax purposes

The ECOFIN Council has updated the list of non-cooperative jurisdictions, adding the BVI, Costa Rica, Marshall Islands and Russia. The countries in the list below are those that refused to engage with the EU or to address tax good governance shortcomings (situation on 14 February 2023): American Samoa, Anguilla, Bahamas, British Virgin Islands, Costa Rica, Fiji, Guam, Marshall Islands, Palau, Panama, Russia, Samoa, Trinidad & Tobago, Turks & Caicos, US Virgin Islands, and Vanuatu.

EU Relaxes State Aid Rules in Transatlantic Subsidy Race

The European Commission decided to amend the General Block Exemption Regulation (GBER), allowing more scope for the granting of State aid and subsidies by Member states in response to the US Inflation Reduction Act (IRA). Alongside the Temporary Crisis and Transition Framework, this package now makes it much easier for governments to provide State support for key sectors in line with the Europe’s Green Deal Industrial Plan.

EU Commission Adopts Regulation on Tax Transparency

The European Union has adopted an Implementing Regulation concerning tax transparency and the criteria for information reported by platforms to non-EU countries and exchanged with Member States. This Regulation establishes criteria for determining whether information automatically exchanged under an agreement between the tax authorities of Member States and a non-EU country is equivalent to that specified in Council Directive (EU) 2021/514 (‘DAC7’), i.e. mandatory automatic exchange of information reported by platform operators.

The Implementing Regulation establishes criteria to be considered by the Commission in assessing equivalence of exchange process, concerning definitions such as Reporting Platform Operator, Reportable Sellers and Relevant Activity, assessing due diligence procedures, reporting requirements and procedures. The Regulation will enter into force 20 days after its publication in the Official Journal of the European Union.

Global Forum Develops Model Administrative Compliance Strategy for Automatic Exchange of Information

As part of its Strategy to unleash the potential of AEOI for developing countries, the Global Forum Secretariat is developing toolkits and e-learning courses to facilitate the implementation of the AEOI standard. As such, it has developed a Model Administrative Compliance Strategy in order to “assist jurisdictions in developing, improving and implementing their own administrative compliance strategy to ensure the effectiveness of the Standard for Automatic Exchange of Financial Account Information in Tax Matters (AEOI).”

The Model Strategy, the CRS Notification Tracking tool, and the Methodology for implementation of the risk-based approach have all been launched this year, and complement the Toolkit for the Implementation of the Standard for Automatic Exchange of Financial Account Information, which was released in 2021. The assessment tool and its user guide are available on demand to all interested jurisdictions in English. French and Spanish versions will be made available in due course.

OECD Launches New BEPS Multilateral Convention Matching Database

The OECD has launched an updated version of the BEPS MLI Matching Database. The database assists tax authorities and other interested parties in relation to how the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “BEPS MLI”) MLI will apply and modify a specific tax treaty.

The updated database “includes significant improvements that will enhance user experience and provide additional features to support the implementation and application of the BEPS MLI. One of the key updates is the inclusion of historical data, which allows users to view the application of the BEPS MLI at specific points in time. The upgrade also offers a more intuitive interface that makes it easier for users to search for and access information.”

The database was first published in 2017 and presents detailed up-to-date information on the application of the BEPS MLI to tax treaties. In particular, the database presents the “matching results” under the BEPS MLI in respect of each covered tax treaty. The text of the BEPS MLI, the explanatory statement, background information, positions of each Signatory and Party, and the updated database are available at http://oe.cd/mli.

EU Parliament Subcommittee on Tax Matters Hearing on the Role of Enablers in Tax Evasion

On 17 July, the EU Parliament’s Subcommittee on Tax Matters, FISC, held a hearing on “Tackling the Role of Enablers Involved in Facilitating Tax Evasion and Aggressive Tax Planning in the European Union (SAFE)”. Experts at the hearing discussed the role of enablers in facilitating tax evasion and aggressive tax planning with a view to an upcoming proposal by the European Commission with the objective of preventing enablers from setting up complex structures in non-EU countries for tax evasion and aggressive tax planning purposes. The hearing is available to be replayed here.

Source: Malta Institute of Taxation Click here, CFE Tax Advisors Europe Click Here

Please contact David Marinelli should you wish to discuss any matter relating to your Malta registered company.

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