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General Court examines the compatibility of rulings granted by Ireland, Luxembourg and the Netherlands with EU State aid rules

Following multiple State aid investigations launched by the European Commission, the General Court of the European Union was asked to examine whether the advance transfer pricing agreements granted by Ireland, Luxembourg and the Netherlands were compatible with EU law. In the case involving Netherlands, the Court ruled on September 24, 2019 that the Commission’s decision should be annulled, but upheld the Commission’s findings in the case involving Luxembourg. As regards the Irish case, during a hearing that took place on September 17 and 18, 2019 the Court requested the Commission, Ireland and the taxpayer concerned to clarify their arguments.

INSIGHT: Advance Pricing Arrangement Series—Europe

In the years following the introduction of the Organization for Economic Cooperation and Development (OECD) action plan on Base Erosion and Profit Shifting (BEPS), KPMG is expecting a significant increase in transfer pricing controversy. This rise of transfer pricing controversy is fueled by an increase in exchange of information between tax authorities, the number and qualification of tax auditors, tax authority aggressiveness, tax authorities’ use of technology to identify transfer pricing risks and inconsistencies, developing tax laws and regulations, and public pressure on governments to increase revenues generated from corporate income taxes.

Tax authorities have been fighting tax evasion and aggressive tax avoidance through increased transparency. The importance of providing greater tax certainty to taxpayers to support trade, investment and economic growth remain an important focus area for both taxpayers and governments. At the same time, the European economy is encountering the debt crisis, Brexit, trade wars, and tariff discussions. Against this background, multinationals have an increasing demand for legal and planning certainty. Thus, KPMG has seen an increase of Advance Pricing Arrangement (APA) applications covering countries in Europe. This article analyzes these programs in Belgium, Denmark, Germany, Italy, the Netherlands, Poland, Portugal, Spain, Sweden, Switzerland, Ukraine, and the UK.

European Commission investigation into individual Belgian “excess profit” tax rulings

On September 16, 2019, the European Commission launched an investigation into whether the “excess profit” tax rulings granted to 39 companies by Belgium constitute State aid within the meaning of EU law (See the European Commission’s press release).This investigation is a response to the General Court's decision in case T-131/16 annulling the Commission's initial decision that these rulings formed part of a Belgian aid scheme that was incompatible with EU law (see Euro Tax Flash 395). 

A no-deal Brexit and warehousing

How could a no-deal Brexit impact my supply chain? - Does this question ring a bell? Maybe you’ve come across it during a Management meeting or one of your clients asked you this recently? I think it’s fairly safe to assume that, regardless which direction the negotiations take, there will be a significant impact on warehousing both in the UK and in the EU as businesses start stockpiling goods.

Pack your bags; we’re going on a trip!

Whereas a couple months ago the fate of the future relationship between the UK and the EU was uncertain, given recent developments, the chances of a no-deal Brexit are getting higher and higher as the days go by.

When it comes to immigration, or simply the migration of people, the prospect of EU citizens being treated as third- country nationals, under a no-deal scenario, makes me a little nervous.

So, given my state of unease, business leaders must also be feeling uncomfortable. How do I know? Well, I’m regularly contacted by companies regarding how to handle their impacted employees. Here are just a couple of the typical questions I receive: How easily will my employees be able to cross borders? What about social security costs and legal benefits?

No incremental notional interest deduction for assessment year 2021 ?

The notional interest deduction (NID) has become less attractive after the corporate tax reform as the calculation is now based on the positive increase of the equity of the company (incremental notional interest deduction).

Circular letter discusses grandfathering rule in earning stripping regime

The tax authorities have released a circular letter on the grandfathering rule in the new earnings stripping regime. The other aspects of the regime will be discussed in another forthcoming circular letter

AG Opinion regarding Netherlands' withholding tax on dividends paid to foreign investment funds

On September 5, 2019, Advocate General (AG) Pitruzzella of the Court of Justice of the European Union (CJEU) rendered his opinion in the Köln-Aktienfonds Deka case (C-156/17) concerning the compatibility with EU law of the Dutch withholding tax on dividends distributed to non-resident investment funds. The AG concluded that the shareholders and distribution requirements imposed by the Dutch legislation to benefit from a tax refund may be contrary to the free movement of capital.

L'administration clarifie les règles d'exigibilité

Dans sa circulaire administrative 2019/C/65 du 9 juillet 2019, l'Administration de la TVA commente les différents aspects des règles d'exigibilité de la TVA qui sont entrées en vigueur le 1er janvier 2016. Elle évoque également les règles d'exigibilité qui n'ont pas été modifiées depuis lors. Elle clarifie les règles en s'appuyant sur des exemples, selon la nature de l'opération et la qualité du client.

Administratie verduidelijkt de opeisbaarheidsregels

Met haar administratieve circulaire 2019/C/65 van 9 juli 2019 licht de btw-administratie de verschillende aspecten toe over de opeisbaarheidsregels van btw die in werking zijn getreden op 1 januari 2016. Ook de opeisbaarheidsregels die sindsdien niet zijn gewijzigd, komen aan bod. Voorbeelden verduidelijken de regels in functie van de aard van de handeling en de hoedanigheid van de afnemer.