On 1 January, Portugal took over from Germany as President of the Council of the European Union. For the next 6 months, the Portuguese Presidency will focus on the following priorities in the area of tax & VAT, as described in their Presidency Programme.
"The Presidency will address the challenges of European taxation, including the model for taxation of the digital economy, under the principles of fairness and tax efficiency. The aim is to ensure a fair and equitable distribution of taxation in a context of healthy competition, the strengthening of good governance mechanisms and global tax transparency, and to step up the fight against tax fraud, evasion and avoidance through non-cooperative jurisdictions. The Presidency will seek to create the conditions for reaching a political agreement on the revision of the rules on disclosure of information concerning tax on revenues for certain companies and branches" (Public CBCR).
After intensive negotiations, the European Commission reached an agreement on 24 December with the United Kingdom on the terms of its future cooperation with the European Union. The 1276-page agreement also covers several tax & VAT matters.
In terms of tax standards (see p. 214-215), the EU and UK agreed on a good governance clause and commitments to uphold the (OECD) taxation standards on exchange of tax information, anti-tax avoidance, as well as rules on interest limitation, CFC and hybrid mismatches. In addition, the EU and the UK set out, in a separate joint-declaration (see page 3), specific principles on the countering of harmful tax regimes and affirmed jointly their commitment to apply these principles.
In terms of VAT, the agreement provides for a Protocol on mutual assistance to combat VAT fraud as well as to cooperate on the recovery of claims relating to indirect taxes and duties (see p. 1091-1155), which sets out further details on how the UK's and the EU's national tax authorities will work together on these matters.
Following the agreement reached, DG TAXUD has provided another helpful guidance document on the VAT and customs consequences for EU businesses and citizens, which can be found here. All information regarding tax and customs implications of Brexit is collected by the European Commission on this page.
