On July 1, 2024, Hungary assumes the six-month rotating presidency of the Council of the European Union following Belgium. With the recent European elections, the relationship between tax policy and Europe’s competitiveness will be intertwined in the upcoming presidency term.
What Is the Status of European Tax Policy?
1. Measures against tax evasion and competition were crucial during Belgium’s presidency, focusing on:
– Curbing tax evasion, avoidance, and harmful competition.
– Addressing abuse related to withholding taxes.
– Reducing compliance costs for cross-border investors.
– Updating the EU’s list of non-cooperative jurisdictions.
2. The FASTER Directive agreement aimed at enhancing double taxation relief through:
– Common EU digital tax residence certificate.
– Fast-track procedures for refund systems.
– National Registers for financial intermediaries.
3. The VAT in the Digital Age (ViDA) proposal faced challenges over neutrality and double taxation issues, impacting its progress.
Updates from the ECOFIN Report
1. Technical discussions took place on various proposals during the Belgian presidency.
2. Challenges persist in advancing the HOT and BEFIT proposals due to concerns over tax bases and administrative burdens.
3. The EU list of non-cooperative jurisdictions was updated in February 2024.
4. The High-Level Working Party priorities highlight simplifying taxation for individuals, companies, and tax administrations.
Pillar Two Implementation
1. EU’s Minimum Tax Directive implementation highlights variations among Member States.
2. Legislative enactment varies across countries, with Spain, Poland, and Portugal’s pending approval.
Hungarian Presidency Priorities
– Efficiency and competitiveness are core focus areas.
– Addressing tax evasion, supporting international engagement, and easing legal uncertainties are key priorities.
– Simplifying tax rules, resolving double taxation concerns, and enhancing competitiveness through digitalization are vital goals.
Next Steps for European Tax Policy
1. Clear direction and resolution of concerns are essential for successful negotiations.
2. Streamlining tax policy, focusing on actionable VAT policy gaps, and managing rotating presidency responsibility will be crucial.
3. Hungary’s principled tax policy approach will be pivotal in navigating the upcoming tax-related challenges.
As European tax policy evolves, staying informed and advocating for principled tax policies will be critical for a more competitive European Union. Subscribe to remain updated on tax policies affecting you and receive insights from trusted experts.
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