Maltese Presidency secures second legislative agreement on EU tax-related matters

An agreement between EU Member States on Double Taxation Dispute Resolution Mechanisms has been secured by the Maltese Presidency at an ECOFIN Council Meeting in Brussels, chaired by Finance Minister Edward Scicluna. This is the second agreement secured by the Maltese Presidency on tax-related matters, aimed at combating tax inefficiencies and tax evasion.

The new legislation includes a recourse for businesses and for first-time private individuals, at national courts to unblock procedures, thereby empowering EU citizens when seeking redress.

Member States have commended the Maltese Presidency’s efforts in securing a balanced, compromised text for this directive. The directive, as tabled by the Maltese Presidency, will increase tax certainty across the European Union, thereby contributing to economic growth, better competitiveness, and greater investments opportunities. Additionally, Member States remarked that this agreement contributes to a clearer and fairer tax regime that will reduce the potential of double taxation in the single market.

Addressing a press conference following the ECOFIN Council meeting, Scicluna stated that “this directive is an important part of our plan for strengthening tax certainty and improving the business environment in Europe”.

He further noted that the Maltese Presidency, at every ECOFIN meeting, has always advanced tax-related legislation. This is testament to the Maltese Presidency’s commitment to  robust and effective taxation systems across the EU, that would eliminate the potential for tax evasion and aggressive tax planning practices, while simultaneously ensuring that our taxation legislation does not stifle investment.

The Double Taxation Dispute Resolution provides for mandatory and binding arbitration mechanisms, and enhances their enforcement and effectiveness. It lays down common fixed rules and timelines to resolve issues pertaining to double taxation. It now includes all instances of double taxation of income from businesses, and enforcement will now be mandatory across all EU Member States. The new legislation includes a recourse for businesses, and for first-time private individuals, at national courts to unblock procedures, thereby empowering EU citizens when seeking redress.

ECOFIN Ministers also endorsed a report during the meeting on the elimination of barriers to the free movement of capital in Europe. The report contains measures that would have to be implemented by Member States. The EU Commission’s in-depth review of macro-economic imbalances in Member States has also been adopted.

The ECOFIN agenda also included a preliminary discussion on the Common Corporate Tax Base in the EU.