Following the release of the anti-tax-avoidance (ATA) package on January 28, 2016 by the European Commission, the Dutch Presidency of the Council of the European Union presented an EU-Base Erosion and Profit Shifting (BEPS) Roadmap (the Roadmap) to the Members of the High Level Working Party on Tax issues.
The Roadmap provides for insight on the future work by the Dutch Presidency on certain EU initiatives - inter alia the anti-tax-avoidance package - in the field of BEPS and most importantly gives insight into what the Dutch Presidency wants to achieve during its term and the timing around that. The Dutch Presidency states that this Roadmap takes into account views expressed by Member States in informal bilateral contacts, as well as the recent Commission initiatives and the results of the OECD’s work on BEPS.
Based on the roadmap we identify three items which the Dutch Presidency seems to classify as important by putting a timing objective on it:
- Political agreement on implementation of the ATA Directive, in its entirety or partly before the end of the term of the Dutch Presidency (we refer to our Tax Alert on the ATA Directive)
- Early political agreement on introduction of country-by-country reporting rules within the EU by means of introduction of a CbCR directive and legislative adoption thereof before the end of the term of the Dutch Presidency. It is expected that a political agreement will be reached on this topic during the EcoFin meeting on March 8, 2016
- Finalize explanatory notes and guides before the end of the term of the Dutch Presidency on treatment of hybrid mismatches situations involving third countries.
Other elements included in the Roadmap are (i) a proposed anti-abuse clause to the Interest and Royalties Directive, (ii) a reform of the Code of Conduct Group, (iii) changes to existing EU patent box regimes in line with the 'modified nexus approach'.
As a final point the roadmap addresses work items that Member States have expressed a willingness to undertake in the medium to longer term, including coordinating the EU’s work on transfer pricing with the OECD’s Action Plan recommendations regarding transfer pricing, developing EU guidance on the OECD’s Action 12 recommendations on disclosure of aggressive tax planning, and developing rules on the issuance of tax rulings.
The Roadmap is the first step by the Dutch Presidency on the ambitious EU goals in the field of BEPS. The Dutch Presidency seems very committed to reach progress within a short timeframe on some very important topics. Since the Dutch Presidency's term ends on June 30, 2016 it remains unclear which goals and what political agreements will effectively be reached within this term. In any case, it may be expected that Slovakia, the next Presidency, will continue to pursue the ambitious EU goals.