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During their plenary meeting of May 28-29, 2019 the members of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) adopted a programme of work to develop a consensus solution to the tax challenges arising from the digitalisation of the economy. The document contains a road map for resolving the tax challenges arising from the digitalisation of the economy, and committed to continue working toward a consensus-based long-term solution by the end of 2020.
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On May 28, 2019 the OECD issued a press release announcing that on the same day Albania signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). Therewith Albania became the 88th jurisdiction to join the MLI.
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On May 23, 2019 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Sharpston in the Case C-270/18, UPM France versus Premier ministre, Ministre de l’Action et des Comptes publics (ECLI:EU:C:2019:442), was published.
Council Directive 2003/96/EC of 27 October 2003 restructuring the [EU] framework for the taxation of energy products and electricity (Directive 2003/96, or ‘the Directive’) afforded France a special transitional period to make the necessary adjustments to existing arrangements. This reference for a preliminary ruling enquires as to the respective rights and obligations of taxable entities and of the Member State during that period.
Specifically, UPM France claims, on the basis of Article 14(1)(a) of Directive 2003/96, that it is entitled to reimbursement of tax paid on its consumption of natural gas in an installation for the combined generation of heat and electricity, where the electricity thereby produced was consumed for its own use in a further manufacturing process. UPM France has been unsuccessful thus far before the national courts. The Conseil d’État (Council of State, France; ‘the referring court’), as the final court of appeal, has now requested the Court’s assistance in interpreting Articles 14(1)(a) and 21(5), third subparagraph, of Directive 2003/96.
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On May 22, 2019 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Bobek in the Case C-329/18, Valsts ieņēmumu dienests versus SIA Altic (ECLI:EU:C:2019:442), was published.
SIA Altic bought rapeseed from two other companies and deducted the input value added tax (VAT) paid on those transactions. A subsequent inspection carried out by the Latvian tax authorities revealed that those companies were fictitious. The tax authorities therefore considered that the transactions had not taken place and ordered SIA Altic to pay the corresponding VAT. SIA Altic sought the annulment of that decision. Both the first- and the second‑instance national courts ruled in its favour.
The Augstākā tiesa (Supreme Court, Latvia), seised on appeal on a point of law, harbours doubts as to the correct interpretation of Directive 2006/112/EC on the common system of value added tax read in conjunction with the requirements of sectorial legislation in the field of food law. Those doubts concern the argument by the Latvian tax authorities that SIA Altic should have known about the involvement of its co-contractors in VAT fraud, because it was active in the food sector and it was therefore obliged to verify its business partners to the higher standard applicable in that sector, in accordance with the obligations imposed by Regulations (EC) No 178/2002, (EC) No 852/2004, and by (EC) No 882/2004.
The present case gives the Court the opportunity to refine its case-law on the criteria to determine whether an operator ‘knew or should have known’ that he was participating in an operation connected with VAT fraud for the purposes of refusing the right to deduct. In particular, the Court is asked to what extent, if at all, specific sectorial obligations applicable to operators active in certain fields, such as those pertaining to food law, are of relevance for the general tax assessment of whether or not an operator was or should have been aware that he was involved in a transaction connected with VAT fraud.
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During its meeting of May 17, 2019 the Economic and Financial Affairs (ECOFIN) Council has once again adjusted the EU's list of non-cooperative jurisdictions in taxation matters. This time Aruba, Barbados and Bermuda were removed from the list.
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