CFE’s Tax Top 5 – March 2019

BRUSSELS  26 MARCH 2019

Commission Publishes Analysis on CCTB Implementation

The EU Commission has published a taxation working paper containing a detailed analysis of the potential impact the introduction of the European Commission proposal for a Common Corporate Tax Base that was relaunched in 2016 would have on the tax burden of corporations.

The executive summary sets out that the aim of the study is “to evaluate the impact [of the proposal]…on the effective corporate tax burdens in the 28 EU Member States and to assess the relative importance of single elements of the harmonised tax base”.

The study demonstrates that, when incorporating the Allowance for Growth and Investment provided for in the proposal as a means of interest deduction and the research and development incentives, there is an average decrease in effective tax burdens of 5.1%. The study determines that newly founded, profitable and growing companies would benefit from the growth and investment allowance in particular.

In a situation where national research and development incentives already apply, it was found that introduction of the CCTB would still reduce the effective tax burden by an average of 3.9%.

The CCTB proposal was listed as a priority by the Romanian Presidency and is the subject of ongoing discussion at the EU Council.

EU Completes No-Deal Brexit Preparedness Measures

In light of the increasing likelihood of a no-deal Brexit, the EU Commission and Council have now completed final preparedness preparations.

In the event there is a no-deal Brexit, the EU will apply third-country tariffs and customs rules at its borders with the UK, including customs checks and controls, as well as verification of compliance with EU norms. Significant delays at borders are expected. As concerns State aid, current EU rules also provide a means for assisting businesses encountering no-deal Brexit difficulties.

The EU Council has also passed a series of legislative measures as part of the no-deal preparedness preparations, concerning social security, fisheries, transport and the Erasmus programme, amongst others.

Detailed tax-related no-deal Brexit preparedness documents can be located here.

OECD Releases Beneficial Ownership Toolkit

The OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes has released a beneficial ownership toolkit aimed to assist governments in implementing the Global Forum’s standards concerning the ultimate beneficial owner of a company or entity.

The toolkit includes explanations of the technical and legal requirements concerning beneficial ownership, the criteria to be used to identify the beneficial owner, as well as explanations of existing measures which ensure the availability of beneficial ownership information and its role in automatic exchange of information regimes.

Pascal Saint-Amans, Head of Centre for Tax Policy and Administration at the OECD stated “Transparency of beneficial ownership information is essential to deterring, detecting and disrupting tax evasion and other financial crimes. The Global Forum’s standard on beneficial ownership offers jurisdictions flexibility in how they implement the standard to take account of different legal systems and cultures. However, that flexibility can pose challenges particularly to developing countries. This new toolkit is an invaluable new resource to help them find the best approach.”

EU Reaches Provisional Funding Agreement on Tax Cooperation

Provisional agreement has been reached concerning the funding of the EU’s tax cooperation programme, “Fiscalis” for the period 2021 – 2027.

The programme supports cooperation between tax administrations by way of funding improved and better connected IT systems, the sharing of good practices and training, coordination of joint audits and risk management processes and fostering Union competitiveness.

Commissioner Pierre Moscovici said of the agreement, “Today’s agreement will allow the Fiscalis programme to continue supporting Member States to work together to find innovative solutions to the problems facing our tax administrations. When coupled with new technology, this work can have a hugely positive effect in our overall fight against tax avoidance and tax evasion, thereby protecting our Single Market. The Fiscalis programme may have a small budget, but it has a big added value.”

The provisional agreement must now be formally approved by Parliament and Council.

Global Forum on VAT Endorse Rules Concerning Collection of Tax by Marketplaces

Delegates attending the OECD’s Global Forum on VAT which took place on 20 – 22 March in Australia unanimously voted to endorse new rules concerning the collection of VAT by online platforms/marketplaces and to allow for data sharing and enhanced co-operation between tax authorities and online marketplaces.

The agreed measures were contained in a new report of the OECD, The Role of Digital Platforms in the Collection of VAT/GST on Online Sales, which builds on the 2015 BEPS Action 1 Report on the Tax Challenges of the Digital Economy. As over two-thirds of online transactions take place by way of marketplace/platform, it is hoped the agreed measures will allow authorities to focus on the compliance of platforms, rather than the individual trader, and significantly increase the amount of revenue collected.

Speaking about the agreed measures, David Bradbury, Head of Tax Policy at the OECD noted, “These new measures provide governments with the tools needed to ensure that online platforms play their part in the collection of VAT/GST. They will also level the playing field for those on our high streets and in our malls, who have had to compete against online competitors enjoying a tax advantage”.

The selection of the remitted material has been prepared by
Piergiorgio Valente/ Aleksandar Ivanovski/ Brodie McIntosh/ Filipa Correia

 

BRUSSELS  18 MARCH 2019

Summary: OECD Public Consultation on the Taxation Challenges of the Digital Economy

As part of the ongoing work of the Inclusive Framework and the Task Force on the Digital Economy, the OECD organised a public consultation on 13-14 March on the tax challenges arising from the digitalisation of the economy, with 400 invited stakeholders from business, professional and trade associations, practice, NGOs and academics. The discussions focussed on the key questions identified in the OECD consultation document and the issues raised in the written submissions received as part of the consultation process. Over the two days, experts and four panels of speakers debated the design and administration considerations of the proposals for revised profit allocation and nexus rules presented under the first pillar (i.e., user participation, marketing intangibles and significant economic presence), as well as the policy rationale and objectives of the second pillar proposals on the global anti-base erosion proposal.

Perhaps not surprisingly, digital businesses expressed reservations about the scope of the user participation proposal and the ‘arbitrary’ distinction in ring-fencing particular business models. Conversely, non-digital companies articulated concerns about the scope of the marketing intangibles proposal by modifying the application of the arm’s length principle. The common ground in discussions concerning the revised profit allocation rules was the importance of simplicity, certainty, the absence of double taxation or unilateral measures and presence of mandatory dispute resolution mechanisms in any future solution. Considering that proposals one and two (user contribution and marketing intangibles) bear similar features, it was suggested these proposals could be implemented through adjusting the present framework without the need to dismantle the whole international tax system. Some participants suggested alternative proposals, and even formulary apportionment, to the extent an agreement on the formulary elements was possible.

More concerns were raised regarding the global anti-base erosion proposals, with some participants highlighting that the residual BEPS issues have little to do with income allocation. Once the profit allocation issues have been resolved, a business representative said, the pressure on pillar two will be reduced considerably. The tax on base eroding payments was assessed as very complex, with double tax treaty issues, lack of dispute resolution, double taxation and, significantly, possible EU law challenges. A Big Four speaker said that tax advisers are agnostic to any outcome of this process, maintaining that there was a need for global consensus, and fast, and a need for analysis of potential unintended consequences, double taxation and administrative burden. Another business representative queried whether the minimum tax rates proposal is actually consistent with the OECD’s longstanding position that tax rates are a matter of national government’s tax policy and parliamentary process, not international law.

From a developing country perspective, NGO representatives questioned the appropriateness of the OECD as a forum to hold these discussions, calling for a more inclusive international tax policy body to take over. NGOs criticised the tax on base eroding payments, whilst expressing more support for the income inclusion rule. The key role of transparency was stressed, followed by a call to make the current CbCR rules public, in order to allow developing countries access to data to make appropriate adjustments. A World Bank representative welcomed the discussion, raising the policy issue of inversions as a tax strategy that undermines the effectiveness of CFC rules in the context of the income inclusion rule discussion.

In concluding the two-day discussions, Pascal Saint- Amans, the Director of the OECD Centre for Tax Policy and Administration, praised the constructive contributions and the positive engagement. The Co-Chairs of the Task Force also stated they were pleased with the engagement of the stakeholders, who presented original ideas to address the significant challenges ahead. Overwhelmingly, the participants agreed on the flaws of the existing fragmented approach to taxation of the digital economy. There was a general acceptance on the need to redouble efforts to reach a global governmental agreement. Considering the ambitious timeline, the OECD announced more frequent meetings of the Task Force on the Digital Economy would be held, and another consultation where more detailed technical contributions are expected by the end of 2019.

EU-Wide Protection of Whistleblowers Agreed

On 11 March 2019, EU Council and Parliament negotiators reached provisional agreement on the proposed directive to establish EU-wide rules for the protection of whistleblowers who report on breaches of EU law, including those reporting on issues related to tax fraud and money laundering.

The proposed directive will provide those persons reporting on breaches of EU legislation with internal and external reporting procedures for whistleblowing. Companies and authorities will also have feedback obligations, such that they have 3 months to respond to whistleblower reports under the proposal. The directive also includes provisions which would forbid all forms of retaliation, to be enforced by means of sanctions. Whistleblowers are also to be provided access to free advice and remedies in instances where retaliation is experienced, with the burden of proof to be reversed such that the organisation or person must prove they are not acting in retaliation against the whistleblower.

In July 2018, the CFE issued an Opinion Statement on the EU Commission proposal, which set out CFE’s support for proposals that seek to establish horizontal rules for protection of whistleblowers, as well as their role in advancing public policy interests, specifically reporting tax fraud, corruption, abusive and illegal practices. The Opinion Statement highlighted certain aspects of the Commission proposal in relation to taxation that in our members’ view merited further technical refinement, in particular the broad wording of Article 1(1)d. However, the wide scope of application as proposed by Commission has been retained.

The agreement will now need to be confirmed by Coreper and the EU Parliament’s Legal Affairs Committee, before a final vote of Council and the full House. If agreed, the directive will enter into force 20 days after publication in the EU Official Journal.

EU Council Updates “Blacklist” of Non-Cooperative Jurisdictions for Tax Purposes

Agreement was reached at last week’s ECOFIN meeting on 12 March to update the list of non-cooperative tax jurisdictions for tax purposes, i.e. the “Blacklist”, in the first comprehensive revision of the list since it was created in 2017.

Following on from the Code of Conduct Group on Business Taxation’s review of commitments made by jurisdictions to implement tax good governance principles of transparency, through automatic exchange of information, and becoming members of the Global Forum or ratifying the OECD Multilateral Convention on Mutual Administrative Assistance, the jurisdictions of Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, Marshall Islands, Oman, United Arab Emirates and Vanuatu were added to the list for failing to comply with commitments by the agreed deadlines.

Countries who have made high-level commitments to remedy EU concerns and reform tax policies will be subject to close monitoring by the Council. The full list of jurisdictions that are now included on the list is as follows: American Samoa, Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, Guam, Marshall Islands, Oman, Samoa, Trinidad and Tobago, United Arab Emirates, the US Virgin Islands and Vanuatu.

UK Publishes No-Deal Brexit Tariff Regime

On 13 March, the UK government published details of a temporary tariff regime that will apply in the event of no-deal Brexit for an initial period of 12 months, to be thereafter reviewed. Under the published regime, the vast majority of goods being imported, around 87% of goods, would be eligible for tariff-free importation.

Tariffs will apply to imports on finished automobiles to maintain the UK’s automobile industry, certain fertilisers and fuels to protect against dumping, beef, lamb, pork, poultry and dairy products to protect the UK farming industry, and on bananas, raw cane sugar and certain fish, to continue commitments to provide preferential access to the UK for developing markets.

However, import tariffs will not apply to goods being imported from Ireland into Northern Ireland, as the government also announced it would temporarily not impose any new controls on imports at the Northern Ireland land border.

This regime is in addition to the simplified transitional procedures that will come into effect in the instance of a no-deal Brexit, whereby businesses established in the UK that import goods from the EU into the UK and register to be subject to transitional simplified procedures will be entitled to transport and import goods without the need for making customs declaration duties at the border. They will also be entitled to delay payment of import duties, if so desired.

Trade Policy Minister George Hollingberry said of the temporary tariff regime: “This balanced approach will help to support British jobs and avoid potential price increases that would hit the poorest households the hardest. It represents a modest liberalisation of tariffs and we will be monitoring the economy closely, as well as consulting with businesses, to decide what our tariffs should be after this transitional period.”

Global Forum Publishes Tax Transparency Peer Reviews

The OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes has published seven peer reviews assessing the compliance of certain jurisdictions with international standards of transparency and exchange of information on request. The reviews focused on performance concerning access to information, developing exchange of information networks and monitoring requests for information.

The jurisdictions subject to the peer reviews were Hong Kong, Liechtenstein, Luxembourg, the Netherlands, North Macedonia, Spain and the Turks and Caicos Islands. All jurisdictions were deemed “largely compliant”. The reviews include recommendations for improving their compliance rating.

The reviews were undertaken as part of the second round of peer reviews by the Global Forum, following the international standards for transparency and exchange of information being updated to include aspects relating to beneficial ownership.

The selection of the remitted material has been prepared by
Piergiorgio Valente/ Aleksandar Ivanovski/ Brodie McIntosh/ Filipa Correia

BRUSSELS  11 MARCH 2019

OECD Publishes Submissions on Taxation Challenges of the Digital Economy

Ahead of the public consultation meeting to be held this week in Paris, on 13 and 14 March, as part of the meeting of the Task Force on the Digital Economy, the OECD has published the submissions received in response to the public consultation concerning potential solutions to issues surrounding taxation of the digital economy.

The public consultation meeting with the OECD’s Task Force on the Digital Economy which will take place in Paris will also be broadcast live on the OECD website, and can be watched on replay. Those interested in watching the consultation can do so here.

The consultation was launched following publication of a Policy Note identifying that discussions at OECD level will be based around two pillars. The first pillar will focus on how the existing rules that divide the right to tax the income of multinational enterprises among jurisdictions could be modified to take into account the changes that digitalisation has brought to the world economy. The second pillar aims to resolve remaining BEPS issues and will explore two sets of interlocking rules designed to give jurisdictions a remedy in cases where income is subject to no or only very low taxation. CFE’s submissions concerning the consultation can be viewed on our website.

Commission Releases March Infringement Package

The European Commission has published its March infringement package setting out the legal action being pursued against various Member States by the Commission for non-compliance with obligations under EU law. The Commission sent letters of formal notice to Finland, Hungry and Spain concerning non-compliance, and a reasoned opinion to Germany in relation to tax matters.

The Commission sent a letter of formal notice to Spain, requesting it bring into line capital gains deductions rules as concerns taxpayers in Norway, Iceland and Liechtenstein, such that tax residents in those countries are also afforded the freedom of movement of capital provided for in the EEA Agreement. Similarly, Spain was also requested to amend legislation which provides a tax deduction for residents on income derived from the letting of dwellings, on the basis this is contrary to the fundamental freedom of movement of capital.

Finland has been requested to amend legislation providing deductions for group contributions between affiliated domestic companies, as it does not allow for deductions to be made by groups with affiliated companies in other EU or EEA States, contrary to the freedom of establishment.

Hungary was also issued with a letter of formal notice concerning its legislation on duties on property acquisition for foundations, which currently exempts inheritance, gifts and quid pro quo as concerns domestic foundations. The Commission argues this is contrary to the free movement of capital.

Finally, Germany was issued with a reasoned opinion setting out the Commission’s view that denying a certain housing premium to cross-border workers is contrary to the freedom of movement of workers and the freedom of establishment and that that legislation needs to be amended.

IMF Reviews Corporate Taxation of the Global Economy

The International Monetary Fund (IMF) has published a policy paper evaluating the current state of international corporate tax reform and setting out the ambition to build on the recent progress in international cooperation on tax matters. The paper, discussed by the IMF Executive Board on 21 February 2019, takes stock of the international progress to date, providing a high-level overview of the key economic considerations and implications of various reform proposals. The IMF is not a standard setting body in the area of international tax, and as such continues to support the work undertaken by the OECD. Whilst accepting that the current international tax governance arrangements are broadly appropriate, the Board of IMF suggested that the Platform for Collaboration on Tax (bringing together the IMF, OECD, UN and World Bank) could have a more meaningful future role in supporting international tax coordination.

The IMF Board of Directors welcomed the considerable progress made at OECD level in addressing the BEPS issues by expanding the scope of cooperation to include non-OECD countries via the Inclusive Framework. In respect of the current debate to address the tax challenges of the digitalising economy, the IMF recognised the complexity of the process from a political and technical perspective, noting that views on the matter continue to differ significantly among countries. Hence, the IMF paper refrained from endorsing any of the proposals for tax reform arising from the OECD debate. Instead, the paper focuses on the residual BEPS issues, in particular profit shifting and harmful tax competition, which is of critical concern for the ability of emerging and developing countries to secure their tax bases on inward investment.

ECOFIN to Discuss Blacklist, Excise Duties & Digital Tax Developments

At its meeting on 12 March, the Economic and Social Affairs Council will discuss the List of Non-Cooperative Jurisdictions for Tax Purposes, excise duties, digital services tax and the Commission’s Winter Package.

The Council is expected to reach political agreement on the harmonisation of excise duties on alcohol and alcoholic beverages. Ministers will also reportedly debate developments concerning the proposed EU digital services tax, and discuss other developments taking place internationally concerning the issue, such as the OECD consultation. Additionally, ministers will exchange views concerning the recommendations contained in the Commission’s Winter Package for each Member State. Finally, the Council will also review the jurisdictions currently included on EU list of non-cooperative jurisdictions for tax purposes and is expected to adopt new conclusions on the matter.

Ahead of the ECOFIN meeting, Member States have also now unanimously rejected the Commission’s Delegated Regulation identifying a list of high-risk third countries with deficiencies in their anti-money laundering and counter terrorist financing regimes. The Commission will now need to prepare a revised list addressing the concerns raised by Member States in their rejection of the first proposal.

Commission Opens Investigation into Interest-Free Loans

The EU Commission has opened an in-depth investigation into whether tax rulings granted by Luxembourg to food and drink packaging company Huhtamӓki may have given it an unfair advantage over competitors.

Huhtamӓki has its headquarters in Finland, but operates a group structure. The Commission will investigate three tax rulings of the Luxembourg government to the Luxembourg-based entity of the company, Huhtalux. One of these rulings was disclosed as part of the Luxleaks investigation.

The rulings approved the tax treatment of intra-group financing structures in place, whereby Huhtalux received interest-free loans from a company in the group, then used to finance other companies in the group through interest-bearing loans. The rulings allowed the Luxembourg company to deduct the interest payments from the interest-free loans, interest which was not actually paid, and reduce the company’s tax base. The Commission believes the ruling approving this deduction has resulted in a selective advantage being conferred on the group as compared with stand-alone companies.

Competition Commissioner, Margrethe Vestager, said of the investigation: “Member States should not allow companies to set up arrangements that unduly reduce their taxable profits and give them an unfair advantage over their competitors. The Commission will carefully investigate Huhtamäki’s tax treatment in Luxembourg to assess whether it is in line with EU State aid rules.”

The selection of the remitted material has been prepared by
Piergiorgio Valente/ Aleksandar Ivanovski/ Brodie McIntosh/ Filipa Correia

BRUSSELS 4 MARCH 2019

Member States Veto EU Commission’s Blacklist of High Risk Third Countries for AML Purposes

At a working group meeting last week, 27 of the 28 Member States indicated they will vote against the Commission’s Delegated Regulation identifying a list of high-risk third countries with deficiencies in their anti-money laundering and counter terrorist financing regimes, in compliance with obligations under the 4th and 5th Anti-Money Laundering Directives.
The jurisdictions included on the Delegated Regulation are: Afghanistan, American Samoa, The Bahamas, Botswana, Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands and Yemen.

Member States were reportedly discontent with the methodology used to determine whether a jurisdiction would be included on the list, as well as the limited number of days to review the Regulation. Certain inclusions also threaten trade deals between Member States and countries included on the list, in particular with Saudi Arabia. To that end, a group of center-left and left MEPs have written a letter expressing their displeasure that Member States are attempting to have certain jurisdictions removed from the list. The final deadline for Member States to oppose the Regulation is 13 March, and will be formally voted in the coming week.

Parliament’s TAX3 Committee Approves Report

On 27 February, the European Parliament’s Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance, “TAX3”, voted, by a majority of 34 votes to 4, with 3 abstentions, its draft report. The report presents the recommendations of the Committee following ten months of hearings concerning anti-money laundering and aggressive tax planning.

The report recommends that Commission and Council adopt a comprehensive definition of aggressive tax planning, as well as a definition of permanent establishment, economic activity requirements and expenditure tests to avoid companies having an artificial taxable presence in a Member State.

Additional recommendations include that an EU anti-money laundering watchdog ought to be established, the Commission ought to propose that a European financial police force be established, that golden visas ought to be phased out and that whistleblowers need to be provided with better protection. An amendment which recommends imposing a mandatory rotation for auditors after 7 years of service was also approved. A finding to include in the report that Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta and The Netherlands all display traits of a tax haven and facilitate aggressive tax planning was also approved.
Chair of the committee, Petr Ježek, said of the voted report: “The considerable amount of work achieved by this committee over its twelve-month mandate has shed light on unprecedented issues affecting the banking and financial sectors. The investigations and hearings have helped us draft stronger recommendations, notably on the need to enforce EU AML/CFT legislation better, stricter banking supervision, and enhanced information exchange among FIUs and tax authorities. It is now crucial to maintain pressure for the implementation of our recommendations to the governments and the relevant actors.”
The report will now be voted by the European Parliament Plenary in the second sitting in Strasbourg between 25 – 28 March.

CJEU Decisions in Danish Beneficial Ownership Cases

On 27 February, the Court of Justice of the European Union handed down the long-anticipated decisions in the joint cases of T 116/16 -T Danmark & 117/16 – Y Danmark, concerning the Parent-Subsidiary Directive, and joined cases C 115/16 – N Luxembourg 1, Case C 118/16 – X Denmark, Case C 119/16, C Danmark I and Case C 299/16, Z Denmark, concerning the Interest and Royalty Directive.

The Danish companies in the cases concerned were owned by parent companies in other Member States, who were themselves owned by companies in third countries. Dividends or interest were paid by the Danish companies to the EU parent companies, which the Danish companies argued were either free of withholding tax according to the Parent-Subsidiary Directive or Interest and Royalty Directive. The Danish tax administration disagreed, arguing that given recipients of the dividends/interest were not the beneficial owners of the payments, the exemption should not apply.

Concerning the Interest Directive, the CJEU was accordingly asked to indicate whether the recipient of the interest payment was indeed the beneficial owner and could avail itself of the withholding tax exemption in the directive. In answering the question, the Court looked to the OECD Model Tax Convention for the definition of beneficial ownership, and held that if a company would be deemed to be a beneficial owner under the OECD Convention, i.e. benefited economically, it would be likely that it would be a beneficial owner of interest under the Interest and Royalty Directive.

In respect of the Parent-Subsidiary Directive, the beneficial ownership test was not relevant. However, it mandates that a Member State must apply either the credit method or exemption method to a dividend paid to another Member State, except in the case of fraud or abuse. The Court was accordingly asked whether the anti-abuse provision needs to be enacted in domestic legislation in order for a Member State to invoke this argument. The Court held that a general anti-abuse provision can be relied on by a Member State, based on the EU principle of abuse of law, such that no domestic legislative provision is necessary. However, the Court noted that the Cadbury Schweppes test concerning abuse, i.e. that the transaction is purely artificial and was designed to circumvent the proper application of legislation of the Member State in the case in question, must continue to be met.

This aspect of the judgment will be significant for Member States where no anti-abuse provisions have been implemented into national legislation.

Commission Releases 2019 Winter Semester Reports

The EU Commission has released its 2019 Winter Semester Reports detailing the economic and social challenges and policies of each of the Member States. The Reports confirm the expectation that the European economy is expected to grow, with growth forecast for each Member State. However, imbalances remain in many of the Member States’ social and economic policies and situations.

The reports note that many Member States will continue to implement reforms to taxation systems, in particular to reduce taxation of labour. Latvia and Lithuania are introducing a revised personal income tax rate to that effect. Similarly, The Netherlands is reducing personal income tax whilst increasing value added tax rates. Germany and Ireland are also reducing labour tax rates for low and middle-income earners. In terms of resource management through taxation, it was noted that Denmark, Greece and Slovenia have a high rate of environmental tax revenue.

The reports note that in terms of tax planning, transposition of agreed initiatives by all Member States, such as the ATAD legislation, will help reduce tax avoidance, but that tax planning can be further curtailed by increasing the strength of national legislation, increasing administrative cooperation and transparency.

The Commission will now hold bilateral meetings with Member States concerning the findings and recommendations in the reports. Member States are then expected to incorporate fiscal strategies and reform priorities in their National Reform Programmes by mid-April. The Commission will thereafter develop further Country-Specific Recommendations on the basis of these Programmes.

Finland Ratifies OECD’s MLI

Finland has deposited its instrument of ratification for the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. The multilateral tax treaty allows jurisdictions to update their existing double tax treaties and transpose measures agreed in the BEPS project without further need for bilateral negotiations.

The MLI entered into force on 1 July 2018 following on from 5 countries having ratified the instrument, namely Austria, the Isle of Man, Jersey, Poland and Slovenia. There are now 87 jurisdictions that are signatories to the treaty.

The selection of the remitted material has been prepared by
Piergiorgio Valente/ Aleksandar Ivanovski/ Brodie McIntosh/ Filipa Correia