EUROPEAN COMMISSION

Brussels, 15.7.2020

COM(2020) 312 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

AN ACTION PLAN FOR





FAIR AND SIMPLE TAXATION SUPPORTING THE RECOVERY STRATEGY

1. General context - EU tax policies in times of transition

The unprecedented COVID-19 crisis has deeply disrupted the economies in the EU and elsewhere. The EU, its institutions, Member States, businesses and citizens, are facing this immense crisis in fundamentally transformative times, shaped by climate and environmental-related challenges, a digital revolution, growing inequality, and a geopolitical shift.

The Commission aims to lead the transition into a greener and more digital world that is compatible with the principles of our social market economy. Fair, efficient and sustainable taxation is central in delivering on those ambitions: EU tax policies have to ensure that everyone from individuals to corporations pays their fair share. At the same time, EU tax policies have to be designed so that businesses and citizens alike can fully reap the benefits of the Single Market, work and invest cross-border, innovate and create jobs. All of this, while creating the right incentives for sustainable and climate-friendly behaviour, including sustainable investment, and ensuring that the polluter pays principle is respected.

Fair and efficient taxation will be even more important in the months and years ahead, as the EU and the global community seek to recover from the fallout of the COVID-19 crisis. As stressed in the Commission Communication ‘Europe's moment: Repair and Prepare for the Next Generation’ 1 , to ensure that solidarity and fairness is at the heart of the recovery, the Commission will step up the fight against tax fraud and other unfair practices. This will help Member States generate the tax revenue needed to respond to the major challenges of the current crisis. This Communication delivers on that commitment and sets out an ‘Action plan for fair and simple taxation supporting the recovery” containing a set of 25 actions. It is designed to respond to the dual challenge of the current crisis: supporting a swift and sustainable economic recovery and ensuring sufficient public revenue in the EU. The action plan:

·Sketches out measures aimed at reducing tax obstacles for businesses in the Single Market. Tax simplification will improve the business environment, enhance business competitiveness and contribute to economic growth.

·Announces a number of initiatives that will help Member States enforce existing tax rules and improve tax compliance. We need to ensure that Member States secure the tax revenue needed to finance the response to the major challenges of the current crisis, without imposing an undue burden on those already badly affected by the crisis. The fight against tax fraud, avoidance and evasion remains crucial in this respect. This should also contribute to collect in a fairer, well-adjusted, effective and efficient manner among Member States the revenues for both national and EU budget.

This action plan is one key element of a comprehensive and ambitious EU tax agenda for the coming years, which also includes the following important initiatives:

·A well-designed tax system plays an important role in supporting the green transition. The use of taxation as a policy instrument will help to reach climate neutrality by 2050 as well as the other environmental objectives of the European Green Deal.  2  In the process, it will also bring additional public tax revenues to public budgets to support the smart investments for a green transition. Environmental taxes help to provide the right price signals and right incentives to producers, users and consumers to encourage less polluting consumption and contribute to sustainable growth. They may also offer opportunities to reduce taxes in other areas, for example on labour, and if revenue for adequate social protection is protected, they can be a win-win option to address both environmental and employment issues.

·A deep reform of the corporate tax system to fit our modern and increasingly digitalised economy is now even more important to support growth and generate needed revenues in a fair way, by realigning taxing rights with value creation and setting a minimum level of effective taxation of business profits. The Commission is actively supporting the global discussions led by the OECD and the G20 and stands ready to act if no global agreement is reached. Before the end of the year, the Commission will set out the next steps, following up on the global discussions in an Action Plan for Business Taxation for the 21st century. 

·The global fight against tax evasion and avoidance requires decisive action. The covid-19 outbreak has prompted unprecedented action at national and Union level to support Member States’ economies and facilitate their recovery. This includes State intervention to ensure liquidity and access to finance for undertakings, a considerable part of which has been subject to Union State aid rules. The Union list of non-cooperative jurisdictions for tax purposes (‘EU list of non-cooperative jurisdictions’) is designed to address threats to EU Member States' tax bases. Against this background, the Commission puts forward a recommendation that Member States make their financial support to undertakings in the Union conditional on the absence of links between those undertakings and jurisdictions that feature on the Union list.

·To fully deliver on the EU’s fair tax agenda, all existing policy levers have to be activated. It is in this context, that the Commission will explore how to make full use of the provisions of the Treaty on the functioning of the EU (TFEU) that allow proposals on taxation to be adopted by ordinary legislative procedure, including article 116 TFEU.

Next to those flagship tax initiatives, EU tax policies will continue to feed into the wider Commission agenda. For instance, the revision of the tobacco tax directive 3 and the alcohol tax directives 4 as well as the provision on cross-border acquisitions by individuals in the horizontal directive on excise duties 5 will be launched to better contribute to public health objectives and to avoid tax fraud. The Commission will also continue to pursue its agenda for fair, simple, and sustainable taxation in the European Semester, comprising taxation as a tool to shape a holistic agenda for a socially just green transition, including through the promotion of green budgeting. Moreover, the Commission continues to support the implementation of its agenda for fair and simple taxation through its technical support programmes.

2. We already achieved a lot – but more needs to be done

2.1 Fight against tax fraud, evasion and avoidance:

In recent years, the EU has focused its efforts on tackling tax evasion and boosting transparency. Several legislative initiatives have made it harder for taxpayers to avoid and evade their taxes than ever before, including ground-breaking transparency and Member States’ cooperation projects. Specific examples include the anti tax avoidance directive, 9  the Commission recommendation on implementation of measures against tax treaty abuse 10 , and transparency rules for tax rulings 11 and introduction of country-by-country reporting between tax authorities. 12  

Tax authorities today have therefore a broader set of tools to detect and address abusive behaviour and cooperate with other law enforcement authorities. Automatic exchange of information and joint actions have become common in the EU between Member States, as the evaluations of the framework for administrative cooperation in the EU show. 13 Tax authorities have also gained access to anti-money laundering information 14 . Moreover, avoidance schemes now need to be reported, thanks to the new EU rules on potentially aggressive tax planning schemes. 15  

The VAT e-commerce package 16 applicable as from 2021 removed the VAT exemption on imports of goods below EUR 22, obliging to pay VAT on all goods imported into the EU, which will reduce the possibility for fraud. Administrative cooperation instruments in the field of VAT have also been strengthened: Eurofisc 17 on its initiative can now cooperate and exchange information with the European Anti-Fraud Office (OLAF) and Europol 18 ; tax authorities can exchange information with customs authorities on importations subject to VAT and custom fraud 19 and organise joint audits with the active participation of foreign tax officials in administrative enquiries.

However, tax fraud and evasion remain a threat for sound public finances. Revenue loss in the EU due to international tax evasion by individuals, covering personal income tax, capital income taxes and wealth and inheritance taxes, has been estimated at EUR 46 billion in 2016. 20 The VAT gap (i.e. the difference between expected VAT revenues and VAT amounts actually collected) has been estimated at EUR 137 billion in 2017, including cross-border VAT fraud of EUR 50 billion. 21 The Commission presented in 2018 a major overhaul of the VAT system for intra-EU trade 22 . The adoption of this proposal on the definitive regime of VAT would, by removing the exemption on intra-Community supplies, help reduce that gap and make compliance easier. Likewise, corporate tax avoidance in the EU amounts to more than EUR35 billion per year, according to several estimates. 23 These remarkable amounts of revenue lost are even more problematic given that the economic ramifications of COVID-19 will inevitably lead to substantially lower levels of tax revenue. In addition, VAT fraud is in some cases also linked to fraud of customs duties. The tax revenue loss undermines the fair burden sharing between taxpayers as well as the fair national contribution to the EU budget. Almost 75% of Europeans demand more action at EU level to fight tax evasion. 24  

2.2 Tax administration in the digital era

Further action is needed at EU level to reinforce the fight against tax evasion and help tax administrations to keep pace with a constantly evolving economy. The digital economy and the development of new business models create new challenges for tax administrations. Moreover, tax authorities have limited resources at national level to exploit the massive volume of data that they collect through the implementation of measures taken during recent years.

Digitalisation of the economy and of national authorities should also be understood as an opportunity. The use of digital solutions facilitates the tasks of tax administrations and will be instrumental in cutting compliance costs, both for tax administrations and businesses. Furthermore, data analytics is crucial for the use of the growing amount of data collected. In the field of e-commerce, where customs and tax authorities will have at their disposal massive volumes of data and information systems, synergies between tax and customs authorities become particularly crucial at this regard. Digitalisation is also a key factor to alleviate the reporting burden on businesses, especially SMEs, among others through the reuse of information by statistical authorities.

A conference organised by the Commission in December 2019 on VAT in the digital age highlighted the need to deepen the reflection in this area. This reflection should focus on how technology can be used by tax authorities to fight tax fraud and benefit businesses, and whether the current VAT rules are adapted to doing business in the digital age.

2.3 Simple EU tax policies for a competitive single market

The EU has also made progress in simplifying taxation. New rules have been put in place to ensure quicker and more effective resolution of tax disputes in direct taxation arising from the interpretation or application of agreements and conventions that provide for the elimination of double taxation concluded between Member States. 25 The adopted VAT e-commerce package has lifted one of the biggest barriers for small businesses trading cross-border. Companies that sell goods online to consumers can deal with their VAT obligations in the EU through an easy-to-use online portal in their own language.

Initiatives have also been taken at EU level to help Member States using taxation as a tool for sustainable economic growth, including in the context of the European Semester. In particular, the Commission underlined that growth-friendly tax systems can support private investment and improve the business environment, encourage employment, reduce inequalities and contribute to an environmentally resilient economy. Moreover, simplifying the tax system can help limit economic distortions and reduce the administrative burden for companies. The adoption of the VAT rates 26 proposal, currently under discussion in Council, will provide Member States the flexibility to set, under strict criteria, their own rates - needed for the recovery from the current crisis - but will also enable Member States to better align VAT policy with environmental and health objectives.

However, tax compliance costs remain high in the EU. Particularly, we need to support young and innovative businesses that struggle more with administrative complexity than big multinationals. Compliance costs are typically substantially higher for small than for large companies. 27 Estimated tax compliance costs for large companies amount to about 2% of taxes paid, while for SMEs the estimate is about 30% of taxes paid. 28 Moreover, the complexity that arises from the patchwork of 27 different tax systems not only creates loopholes for tax abuse, but also uncertainty for honest taxpayers that are simply overwhelmed and thus inadvertently do not comply with the rules.

Therefore, action is also needed at EU level to have a simpler and more modern tax environment. This would help compliant businesses to reap the benefits of the Single Market and sustain economic growth in the EU. As outlined in the Commission’s recent Communication on barriers to the Single Market, national rules and procedures in the area of taxation are consistently highlighted by businesses as one of the biggest obstacles they face. 29 These obstacles impact in particular businesses that are active cross-border, as they need to adapt to different national systems and administrations. The obstacles that businesses indicate include a wide variety of issues covering registration as well as reporting obligations regarding both VAT and business income taxes.

3. A new action plan for fair and simple taxation supporting the recovery strategy

This Communication sets out a new, balanced approach, combining actions against tax fraud and evasion with measures simplifying the life of honest taxpayers. It puts the taxpayer at its centre. Therefore, the various actions envisaged in the action plan are structured along a taxpayer’s journey. At various milestones of this taxpayer’s journey, the associated actions are described as a way forward for the EU to deliver on the dual objective of fighting tax evasion and making taxation simple and easy.

The plan comprises 25 actions (see Annex) that the Commission will propose and implement until 2024. The possible legislative changes outlined are subject to the results of an impact assessment, including on fundamental rights and especially the right to the protection of personal data that will be prepared where necessary in order to assess the different policy options in accordance with Better Regulation principles 30 . 

3.1 Registration

Effective and efficient registration is the first step in making sure that taxpayers pay their fair share. 31 Within the EU, taxpayers are identified by a taxpayer identification number (TIN). 32 VAT-liable taxpayers are identified by a VAT registration number. Databases holding taxpayers’ data need to be kept up to date: taxpayers have to communicate all the necessary data to tax authorities. When changes occur (for instance, a taxpayer moves permanently to another Member State), registration information should be adapted.

To be efficient, registration should be made as simple as possible. Obtaining TINs and/or VAT numbers should not be burdensome. When taxpayers move to another Member State to work or decide to set up a business there, the process to update registries of taxpayers needs to be smooth so as to keep the administrative burden on taxpayers as low as possible. If taxpayers have to prove their tax residency status, in other words where they are registered as taxpayers, to a tax administration other than their own, the procedure needs to be simple.

3.2 Reporting

Taxpayers keep tax administrations regularly informed of their tax liability, thereby fulfilling several information requirements. To ensure that reporting from taxpayers is as efficient as possible, tax returns have to be simple, the data requested are to be kept to a minimum and the procedures and systems by which taxpayers can submit tax returns to tax administrations should be straightforward. Returns should be pre-filled as much as possible. The principles of e-Government should also apply to tax information, especially when it comes to reporting. Taking a holistic approach, taxpayers should only be required to provide information once via digital, secure, inclusive ‘one stop shop’ e-services. The reuse of such information, e.g. by statistical authorities, should respect appropriate confidentiality regimes.

Effective reporting is rooted in voluntary compliance by taxpayers. Tax administrations rely on taxpayers to provide them with correct information on their taxable income and taxable events. Actions to promote and sustain voluntary compliance and increase trust between tax authorities on the one hand and taxpayers on the other hand can increase the effectiveness of reporting.

Reporting by taxpayers is supported and complemented by reporting from third parties, such as employers, financial institutions and increasingly from other tax administrations.

3.3 Payment

A crucial step in the taxation process is the payment of taxes due. Taxpayers are expected to pay their taxes on time and in full. Most taxpayers do so and voluntarily pay what they have to. To ensure that payments take place in the most efficient way, tax administrations should expand electronic payment methods available to taxpayers. For instance, in some Member States it is possible to pay several taxes also via a smartphone app.

Businesses liable to pay VAT and employers or other agents and intermediaries who pay tax on behalf of taxpayers should also benefit from e-services and simplifications. Ease of payment matters especially for small and medium sized businesses, which tend to face disproportionate relatively higher costs of compliance. 37  

To reach better compliance in the payment of taxes, tax administrations should use new ways of engaging with taxpayers, for instance by making use of a behavioural approach or cooperative compliance.

The amount of tax due should be correct from the start, to avoid that taxpayers have to ask and wait for a refund. Refunds take time and are prone to fraud. When refunds are expected, tax administrations should handle them as quickly as possible, to avoid that taxpayers have to wait long and suffer from cash-flow problems.

3.4 Verification, monitoring and administrative cooperation.

Fair taxation is a cornerstone of the European social model for the benefit of business and citizens. To sustain it, taxpayers are expected to file tax returns and to pay tax on time. Most of them do and the starting point for tax administrations should be a presumption of honesty and compliance. Yet, regrettably, some taxpayers do not play fair. Tax administrations have the duty to check taxpayers’ tax affairs, verify and in some cases run tax audits.

Verifications maintain trust in the fairness of the tax system, ensure a level playing field in taxation and avoid that honest taxpayers end up paying more because other taxpayers are not compliant and do not pay their fair share. Moreover, effective tax control can deter future non-compliance.

To run tax controls efficiently and effectively, tax administrations should rely on risk management techniques to better target tax control at the right taxpayer groups. Verifications should be based on a wide range of sources of information, in particular – in the case of taxpayers active cross-border – information coming from other Member States and third countries thanks to the exchange of information.

3.5 Disputes

Taxation relies on voluntary compliance and as much as possible should be based on a cooperative, positive and harmonious relationship between taxpayers and tax administrations. Yet, reality is not always ideal and sometimes taxpayers and tax administrations disagree

Preventing the possibility of disputes and providing legal certainty to taxpayers would be the primary objective.

However, if a dispute does arise, taxpayers should still have the opportunity to correct or clarify possible misunderstandings in order to avoid the dispute escalating.

Disputes, especially judicial ones, are costly and time consuming. Ideally, such disputes should be avoided but when that is not possible, their fast resolution allows keeping costs for taxpayers and taxing administrations to a minimum. In this respect, some stakeholders have already expressed their preference for more intervention at EU level, specifically on dispute prevention and resolution. 51  

3.6 Simplify EU tax rules for more competitiveness in the Single Market

The actions presented above focus on tax administration, the day-to-day implementation of tax rules. Yet, there are limits to what can be achieved by streamlining tax administration alone. To benefit taxpayers, it is important to simplify the rules.

Irrespective of any simplification measure that tax administrations can take, tax policy remains often very complicated to administer and to comply with. Most taxpayers want to pay their fair share. It is regrettable, however, that in some cases the complexity of tax rules may be a disincentive for them to do so.

To make tax simpler and easy, while supporting compliance, there is a need to update and simplify existing legislation in certain areas. A key benefit will be reinstating a level playing field between EU businesses and competitors outside the EU. Furthermore, coherence with key policy objectives such as the European Green Deal needs to be ensured. It is also important that taxpayers know their rights.

4. Conclusion

The Commission puts forward this ambitious action plan for a fair and simple taxation supporting the recovery strategy in a time of unprecedented challenges. The Commission has activated and will continue to activate all existing policy levers at hand to contribute to a swift economic recovery, while shaping the EU’s transition into a green, digital, and fairer social market economy. The EU’s tax agenda is and will be at the heart of this transition.

The Commission calls upon the European Parliament, the Council but also other stakeholders such as NGOs, trade unions and businesses to actively engage in a constructive and inclusive fashion, so that this action plan will translate into concrete initiatives for the benefit of the EU’s citizens, businesses, and Member States alike.

(1)

COM(2020) 456 final.

(2)

Initiatives such as the review of the Energy Tax Directive and the establishment of a Carbon Border Adjustment Mechanism are part of the European Green Deal, which also aims to create the context for broad-based tax reforms at national level, removing subsidies for fossil fuels, shifting the tax burden from labour to pollution, while taking into account social considerations. As part of the work in support of this objective, the Commission will organise a Conference on Greening Taxation in 2020.

(3)

Council Directive 2011/64/EU of 21 June 2011 on the structure and rates of excise duty applied to manufactured tobacco (OJ L 176 5.7.2011, p. 24 – 36)

(4)

Council Directive 92/83/EEC of 19 October 1992 on the harmonization of the structures of excise duties on alcohol and alcoholic beverages (OJ L 316, 31.10.1992, p. 21-27) and Council Directive 92/84/EEC of 19 October 1992 on the approximation of the rates of excise duty on alcohol and alcoholic beverages (OJ L 316, 31.10.1992, p. 29 – 31)

(5)

Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC, OJ L 9, 14.1.2009, p. 12.

(6)

COM(2020) 314 final

(7)

 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation, OJ L 64, 11.3.2011, p. 1.

(8)

COM(2020) 313 final

(9)

Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market, OJ L 193, 19.7.2016, p. 1–14.

(10)

Commission Recommendation (EU) 2016/136 of 28 January 2016 on the implementation of measures against tax treaty abuse, OJ L 25, 2.2.2016, p. 67–68

(11)

Council Directive (EU) 2015/2376 of 8 December 2015 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation, OJ L 332, 18.12.2015, p. 1–10.

(12)

Council Directive (EU) 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation, OJ L 146, 3.6.2016, p. 8–21.

(13)

European Commission. (2017). Evaluation of Regulation (EU) 904/2010. Commission Staff Working Document, SWD(2017) 428 final (for VAT) and European Commission. (2019). Commission staff working document Evaluation of the Council Directive (EU) no 2011/16/EU on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (SWD(2019)328 final).

(14)

Council Directive (EU) 2016/2258 of 6 December 2016 amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities, OJ L 342, 16.12.2016, p. 1–3

(15)

Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (OJ L 139, 5.6.2018, p. 1).

(16)

  Council Directive (EU) 2017/2455 , Council Regulation (EU) 2017/2454 , Council Implementing Regulation (EU) 2017/2459 , Council Directive (EU) 2019/1995 , Council Implementing Regulation (EU) 2019/2026 , Implementing Regulation (EU) 2020/194 ; https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en#heading_1

(17)

Eurofisc is a network for the swift exchange, processing and analysis of targeted information on cross-border fraud between Member States and for the coordination of follow-up actions.

(18)

Furthermore, Europol launched the new European Financial and Economic Crime Centre (EFECC). The Centre will enhance the operational support provided to the EU Member States and EU bodies in the fields of financial and economic crime and promote the systematic use of financial investigations; https://www.europol.europa.eu/newsroom/news/europol-launches-european-financial-and-economic-crime-centre

(19)

Council Regulation (EU) 2018/1541 of 2 October 2018 amending Regulations (EU) No 904/2010 and (EU) No 2017/2454 as regards measures to strengthen administrative cooperation in the field of value added tax, OJ L 259, 16.10.2018, p. 1–11.

(20)

  https://ec.europa.eu/taxation_customs/sites/taxation/files/2019-taxation-papers-76.pdf  

(21)

  https://ec.europa.eu/taxation_customs/sites/taxation/files/vat-gap-full-report-2019_en.pdf  

(22)

Proposal for a Council Directive amending Directive 2006/112/EC as regards the introduction of the

detailed technical measures for the operation of the definitive VAT system for the taxation of trade between Member States, COM(2018) 329, 25 May 2018.

(23)

While the existence of tax avoidance practices is demonstrated in many studies, it is hard to measure revenues lost to it given the complexity of the phenomenon and data limitation. Dover et al. (2015) finds that the revenue loss from profit shifting within the EU amounts to about EUR 50-70 billion, equivalent to at least 17 % of corporate income tax (CIT) revenue in 2013. Using a General Equilibrium Model approach, Álvarez-Martínez et al. (2018) find that tax avoidance in the EU-28 entails EUR 36 billion corporate tax revenues losses annually. Zucman et. al (2018) estimate that the EU-28 loses around EUR 37 billion.

(24)

European Parliament. (2016). Tax fraud: 75% of Europeans want EU to do more to fight it, European Parliament News, 29-07-2016.

(25)

Council Directive (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union, OJ L 265, 14.10.2017, p. 1–14.

(26)

COM(2018)20 of 18.1.2018.

(27)

European Commission. (2018). Study on tax compliance costs for SMEs, Final report - Study (Published: 2018-12-12).

(28)

  https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/tax_survey.pdf  

(29)

COM(2020) 93 final and accompanying document SWD(2020) 54 final.

(30)

  https://ec.europa.eu/info/law/law-making-process/planning-and-proposing-law/better-regulation-why-and-how_en .

(31)

This chapter focuses on taxpayers and tries to conceptualise them as customers of tax administrations. The taxpayers’ experience is divided into five key steps of interaction between taxpayers and tax administrations: registration, reporting, verification, payment and disputes. These five steps are borrowed from: OECD (2017), Tax Administration 2017: Comparative Information on OECD and Other Advanced and Emerging Economies https://doi.org/10.1787/tax_admin-2017-en . The steps are adapted to the focus chosen so for instance ‘collection’ (from a tax administration’s perspective) becomes payment, from a taxpayer’s standpoint. On customer journey more generally: Lemon, K. N., & Verhoef, P. C. (2016). Understanding customer experience throughout the customer journey. Journal of marketing, 80(6), 69-96.

(32)

 Or equivalent. The “TIN on Europa” webpage of the Commission gives an overview of TINs in the EU: https://ec.europa.eu/taxation_customs/tin/tinByCountry.html  

(33)

 Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, OJ L 347, 11.12.2006, p. 1.

(34)

European Commission. (2016). EU eGovernment Action Plan 2016-2020. Accelerating the digital transformation of government. COM(2016) 179 final.

(35)

European Commission. (2019). Commission staff working document Evaluation of the Council Directive (EU) no 2011/16/EU on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (SWD(2019)328 final).

(36)

Telecommunications, broadcasting and electronic services.

(37)

European Commission. (2018). Study on tax compliance costs for SMEs, Final report - Study (Published: 2018-12-12).

(38)

 COM(2017)778.

(39)

 Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures, OJ L 84, 31.3.2010, p. 1.

(40)

The Commission has to report every five years to the European Parliament and the Council (Art. 27(3) of Directive 2010/24/EU).

(41)

European Commission. (2017). Code of Conduct on Withholding Tax.

https://ec.europa.eu/taxation_customs/sites/taxation/files/code_of_conduct_on_witholding_tax.pdf

(42)

For recent evidence of the persistence of the problem, refer to Advisory Group to the ECB on Market Infrastructures for Securities and Collateral (2020), “10th T2S Harmonisation Progress Report - Harmonisation of European securities settlement and collateral management arrangement”.

(43)

Reference is made here to the EU and national authorities responsible for the supervision of financial markets. More information is available on the website of the European Securities and Markets Authority (ESMA) at: https://www.esma.europa.eu/ .

(44)

  http://www.oecd.org/ctp/exchange-of-tax-information/treatyreliefandcomplianceenhancementtrace.htm  

(45)

 Costs for investors have been estimated to amount to more than € 8 billion/year: European Commission. (2017). Accelerating the capital markets union: addressing national barriers to capital flows. COM(2017) 147 final. On the other hand, tax fraud in the area of withholding tax on cross-border dividends has been estimated to more than € 55 billion, https://www.europarl.europa.eu/news/en/press-room/20181120IPR19552/cum-ex-tax-fraud-meps-call-for-inquiry-justice-and-stronger-tax-authorities

(46)

Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax, OJ L 268, 12.10.2010, p. 1.

(47)

Council Regulation (EU) 2018/1541 of 2 October 2018 amending Regulations (EU) No 904/2010 and (EU) 2017/2454 as regards measures to strengthen administrative cooperation in the field of value added tax, OJ L 259, 16.10.2018, p. 1.

(48)

Reference is made here to the EU and national authorities responsible for the supervision of financial markets. More information is available on the website of the European Securities and Markets Authority (ESMA) at: https://www.esma.europa.eu/  

(49)

 Pilot projects and Preparatory Actions introduce new temporary initiatives that might turn into standing EU funding programmes.

(50)

For more details on the call for proposals:  https://ec.europa.eu/taxation_customs/calls-tenders-grants-calls-expression-interest/TAXUD/2020/CFP-01-eu-tax-observatory_en  

(51)

Responses to the public consultation on the evaluation of the Directive on Administrative Cooperation in taxation, summarised in annex 2 of European Commission. (2019), “Commission staff working document Evaluation of the Council Directive (EU) no 2011/16/EU on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC” (SWD(2019)328 final) .

(52)

 Council Directive (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union, OJ L 265, 14.10.2017, p. 1.

(53)

  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/11883-Evaluation-of-the-special-VAT-scheme-for-travel-agents .

(54)

  Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC , OJ L 9, 14.1.2009, p. 12 .

EUROPEAN COMMISSION

Brussels, 15.7.2020

COM(2020) 312 final

ANNEX

to the

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

AN ACTION PLAN FOR














FAIR AND SIMPLE TAXATION SUPPORTING THE RECOVERY STRATEGY

Overview of tax initiatives that are part of the action plan for fair and simple taxation supporting the recovery envisaged for 2020-2023

#	Action	Means	Timing
Actions to be delivered in 2020-2021
A6	Good practice recommendations for improving tax recovery in the EU	Report from the European Commission to the Parliament and the Council.	2020, Q4
A19	Transforming the VAT Committee into a comitology committee	Legislative initiative to amend the VAT Directive.	2020, Q4
A22a	Evaluation of the VAT special scheme for travel agents	Non-legislative initiative: Commission staff working document – evaluation	2020, Q4
A11	Launch of Tax observatory	Non-legislative initiative, implementation of a European Parliament preparatory action.	2020, Q4
A3	Cooperative Compliance framework for a preventive dialogue between tax administrations and businesses for the common resolution of cross-border tax issues	Non-legislative initiative: pilot project.	2021, Q1 – Q2
A21	Establishment of expert group on transfer pricing	Expert group to elaborate pragmatic, non-legislative solutions to practical problems posed by transfer pricing practices in the EU.	2021, Q1
A20	Conference on data analytics and digital solutions	Non-legislative initiative: communication event.	2021, Q2
A17	Charter on taxpayer’s rights – Communication taking stock of taxpayers’ existing rights under EU law together with a Recommendation to Member States to facilitate the implementation of taxpayers’ rights and to simplify tax obligations.	Communication from the European Commission to the Parliament and the Council. & Commission recommendation addressed to the Member States.	2021, Q3
A10	Extension of automatic exchange of information to crypto-assets / e-money	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal for a Council directive amending the Council Directive on administrative cooperation in the field of direct taxation.	2021, Q3
A18	Update and simplify VAT rules for financial services, to ensure a level playing field within the Union and the international competitiveness of EU companies	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal for a Council directive amending the Council VAT Directive.	2021, Q4
A15	Implementation of Standing Committee for dispute resolution.	Implementation of a permanent body for dispute resolution, a so-called Standing Committee, for which the legal basis is already provided for in the Directive 2017/1852.	2021, Q3
Actions to be delivered in 2022-2023
A8	Digital solutions to levy taxes at source to facilitate tax payment / collection	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal for a Council directive introducing a system of withholding tax relief at source.	2022
A7	Consistency of tax residence rules for individuals to avoid double (non)-taxation	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal for a Council directive to harmonise tax residence criteria.	2022
A2	Better quality and use of tax data	Non-legislative initiative: pilot project to be followed by a Commission staff working document presenting the key findings and recommendations.	2022
A22b	Update VAT special scheme for travel agents to ensure the international competitiveness of EU travel industry.	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal for a Council directive amending the VAT Directive.	2022
A24	Review VAT rules on passenger transport to ensure their coherence with the taxation policy developed under the Green Deal	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal for a Council directive amending the VAT Directive.	2022
A16	VAT dispute prevention and resolution to provide mechanisms to prevent/solve disputes concerning the implementation of the VAT directive	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal for a Council directive introducing a dispute resolution mechanism in the field of VAT.	2022
A1 A4 A5 A23	Package VAT in the digital age: update VAT rules for the sharing economy, move to a single EU VAT registration, modernise VAT reporting obligations and facilitate e-invoicing.	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal for a Council directive amending the VAT Directive and/or a Council directive amending the Council Regulation on VAT administrative cooperation.	2022
A25	E-Commerce package for excise goods: facilitating distance selling of excise goods while minimising fraud and distortions of competition	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal amending the Council Directive on General Arrangement for Excise Duty.	2022
A9	Eurofisc 2.0	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal amending Council Regulation (EU) No 904/2010	2023
A12 A13	Reinforcement of verifications of cross-border transactions by switching from exchanging to sharing of tax-related data. Making the verification process of cross-border transactions faster and more effective by leveraging new technological tools, advanced analytics and flexible data sharing at EU level.	Impact assessment possibly leading to a legislative initiative in the form of a Commission proposal amending Council Regulation (EU) No 904/2010	2023
A14	VAT administrative cooperation between the EU and relevant third countries	Conclusion of agreements between the EU and relevant third countries on administrative cooperation in the field of VAT.	2023