EU Tax Alert Highlights 2023

DAC8 adopted and published in Official Journal of the EU

On 17 October 2023, the Council of the European Union adopted by unanimity the Proposal for a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC 8). This Directive, introduced an EU standardized tax information reporting and exchange framework for crypto-assets and e-money, as well as other rules to expand administrative cooperation between Member States’ tax administrations

EU Commission launches BEFIT: framework for an EU corporate tax system

On 12 September 2023, the European Commission (EC) proposed a Council Directive on Business in Europe: Framework for Income Taxation (BEFIT). The BEFIT proposal was announced earlier and contains a common corporate income tax framework for groups active in the EU. BEFIT lays down rules for calculating an aggregated tax base for members of a BEFIT group and the allocation of the tax base between (eligible) BEFIT group members.

EU Commission proposes harmonized TP rules and ‘fast-track’ procedure

As part of the BEFIT package, the EC presented, on 12 September 2023, a legislative proposal for a Council Directive that integrates key Transfer Pricing (TP) principles into EU law.

EU Commission proposes Directive for Head Office Tax system (HOT) for micro, small and medium-sized enterprises

As part of the BEFIT package, the EC presented, on 12 September 2023, a legislative proposal for a Council Directive establishing a ‘Head Office Tax system’ for micro, small and medium-sized enterprises and amending Directive 2011/16/EU (DAC). The proposed Directive provides micro, small and medium sized enterprises (SMEs) at the initial stages of expansion with an option to compute the taxable result of their permanent establishments (PEs) in other Member States, on the basis of the rules of the Member State where the Head Office (i.e., headquarters of the SME) is resident for tax purposes.

EU Commission presents Proposal for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER)

On 19 June 2023, the EC proposed a Council Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER). This Directive introduces new rules to enhance withholding tax procedures in the EU, aiming to improve efficiency, security, and fairness for investors, financial intermediaries, and tax administrations. The proposal is part of the Commission’s efforts to modernize business taxation and promote cross border investment within the EU.

EU Commission publishes Frequently Asked Questions (FAQs) on Pillar Two Directive

On 22 December 2023, the EU Commission published a FAQs on the Pillar Two Directive. This document is the outcome of informal reflections of the Commission Services on the suggested correct interpretation and transposition of some of Pillar Two rules.

CJ confirms Amazon and Luxembourg win in EU State Aid case (Commission v Amazon.com and Others, Case C-457/21 P)

On 14 December 2023, the CJ sided with Amazon and Luxembourg and dismissed the European Commission’s appeal against a May 2021 judgment of the General Court that had found Amazon did not receive unlawful State aid from Luxembourg. The CJ judgment is final.

CJ sides with Engie and Luxembourg in tax State Aid case (Luxembourg v Commission, joined cases C-451/21 P and C-454/21 P)

On 5 December 2023, the CJ annulled the General Court’s judgment in the ENGIE State aid case (Luxembourg v Commission, joined cases C-451/21 P and C-454/21 P). The CJ set aside the European Commission’s 2018 findings that companies of the French energy group ENGIE had received unlawful State aid from Luxembourg through various tax rulings.

CJ judgment on VAT fixed establishment concept in case of exclusive toll manufacturer (Cabot Plastics, C-232/22)

On 29 June 2023, the CJ delivered its judgment in the case Cabot Plastics Belgium BVBA (C-232/22) regarding the concept of fixed establishment in the manufacturing industry.

CJ judgment on VAT implementing regulation for electronic services platforms (Fenix International Limited, Case C-695/20)

On 28 February 2023, the CJ delivered its judgment in the case Fenix International Limited (C-695/20).This case concerns the application of the undisclosed agent regulations for persons involved in the provision of electronic services.

European Parliament and Council adopt the Carbon Border Adjustment Mechanism (CBAM) Regulation

On 10 May 2023, the Carbon Border Adjustment Mechanism (CBAM) Regulation was signed by the European Parliament and Council. The CBAM Regulation was published in the EU Official Journal on 16 May 2023 and officially entered into force on 17 May 2023.

EU Commission publishes proposal for an ambitious and comprehensive reform of the EU Customs

On 17 May 2023, the EC published the proposal for an ambitious and comprehensive reform of the EU Customs Union. The EC considers these reforms necessary to create an agile and future-proof Customs Union, ready for increased trade volumes and digital transitions. Key changes of the Customs reform proposal include designating digital platforms as ‘deemed importers’ and shifting the responsibility to these platforms for paying applicable customs duties as well as ensuring compliance with new procedural and legislative requirements.

CJ judgment on the primary rules of origin where the production of goods involves more than one country or territory (Stappert Deutschland GmbH, C-210/22)

On 21 September 2023, the CJ delivered its judgment in the case Stappert Deutschland GmbH. The main question concerns the validity of the criterion for determining non-preferential origin relating to goods falling under the Harmonised System (‘HS’) subheading 7304 41, included in Annex 22-01 to Delegated Regulation (EU) 2015/2446 (‘DA’).

CJ judgment regarding the excise duty suspension arrangement owing to an unlawful act solely attributable to a third party (KRI SpA, C-323/22)

On 7 September 2023, the CJ delivered its judgment in the case KRI SpA (’KRI’) (C-323/22) regarding the interpretation of the first sentence of Article 14(1) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products, as amended by Council Directive 2004/106/EC of 16 November 2004 (‘Excise Directive’).