Insights

On June 21, 2023, a new tax treaty between the Netherlands and Belgium was signed and published. The new tax treaty will enter into force after parliamentary approval in both countries. As neighbours in Europe, the Netherlands and Belgium have a lot of trade and transactions between both countries. In this Tax Alert we will highlight the most important changes for international companies.

The Court of Justice of the EU (CJEU) has recently further clarified the concept of a fixed establishment (FE) for VAT purposes in its important decision in the case C-333/20 (Cabot Plastics Belgium SA). On 29 June 2023, the CJEU held that a toll manufacturer in Belgium acting under an exclusive contract did not constitute an FE for its affiliated Swiss principal.

Starting in 2024, a new law for a global minimum profit tax for internationally operating companies will apply in the Netherlands: the 2024 Minimum Tax Act (Pillar 2).

On the 17th of May 2023, the European Commission put forward the proposals for the reform of the EU Customs Union (‘EU Customs Reform’) to be implemented step-by-step starting in 2028.

As of January 1, 2023, new rules apply to counter the practice of substantial interest holders from borrowing funds from affiliated companies instead of distributing.

On 8 December 2022, the European Commission published a new proposed directive. In this proposal, crypto-asset service providers will be required to report information of crypto holdings of their users to European tax authorities. On 16 May 2023, political agreement was reached between EU Member States. The expected entry into force of the proposed directive is 1 January 2026.

On May 16th 2023, the Council of the European Union (the Council) convened an Economic and Financial Affairs Council (ECOFIN) meeting, during which the finance ministers of the European Union (EU) reached a significant milestone. They achieved a political consensus (general approach) on a compromise text for the Directive on administrative cooperation, which implements the rules of the Organisation for Economic Co-operation and Development (OECD) regarding reporting for crypto assets. Additionally, amendments to the Common Reporting Standard (CRS) were included in this Directive, referred to as DAC8.

This article focusses on the latest developments in e-invoicing and the European Commission’s “VAT in the Digital Age” proposal (ViDA). More specifically, it looks at responses and assessments of the ViDA from the EU institutions and from the EU Member States (MSs). In addition, the article gives an overview of the latest EU country developments in the e-invoicing and digital reporting. It concludes with a view on the expected further developments.

Our article “Information obligation for online platforms” of 21 July 2022 provided an overview of VAT obligations of platforms and new requirements for platforms to provide information about their sellers (DAC7). In this article, we not only take a look at the proposed EU rules for platforms, but also explain the recent EU Court of Justice (ECJ) decision over VAT liability of platforms. We begin with an high-level overview of the existing VAT rules for platforms.

On 15 December 2022, the OECD published the framework for the safe harbours and penalty relief under the proposed ‘Minimum Tax Act 2024’ (Pillar 2). The framework is an extension to the ‘Minimum Tax Act 2024’ (Pillar 2) which aims to ensure that multinational enterprises will be subject to a minimum tax rate starting from 1 January 2024. The safe harbours and penalty relief framework aims to lower the compliance burden for companies that operate in high-tax and low-risk jurisdictions.

On January 17th, 2023, the European Parliament published its approval of the European Commission’s draft proposal for Anti-Tax-Avoidance Directive III (ATAD 3) under the condition that a few amendments will be made.

Given the proposed implementation dates, we recommend that entities begin assessing their current corporate structures to understand the potential consequences of ATAD III.

The Court of Justice of the EU (CJEU) has recently clarified in its important decision in VAT case B (C-696/20)) the applicability of VAT in chain transactions.

The European Union (EU) has a solution to the problem of double taxation arising on the new EU Import One-Stop Shop (IOSS) scheme.

From January 1, 2023, platforms will be required to provide information about their sellers under the EU DAC7.

Case C-714/20 of the Court of Justice of the EU (ECJ) is of particular interest to forwarding agents.