EC's DG TAXUD publishes its 2024 work plan

Published on 8 May, EC’s DG TAXUD’s annual work plan for 2024 gives an overview of what to expect from the DG for this year.

Highlights

Here are some key highlights described in the introduction of this document

In 2024, the Commission’s Directorate-General for Taxation and Customs Union (DG TAXUD) will continue to support the Commission’s agenda for a fairer, greener an

more competitive future. DG TAXUD will focus on supporting the negotiations of the proposals tabled in the previous years and on implementing the remaining actions of the headline ambitions of the von der Leyen Commission.

The EU Customs Union is the foundation of the EU Single Market. Its functioning is key to facilitate trade, safeguard revenues and protect citizens and businesses. Since its creation, the role of the Customs Union expanded beyond the traditional job of collecting customs duties. Growing trade volumes and new trade models, technological developments, security risks, geopolitical challenges and the green transition have all created new tasks and challenges for customs. The Commission proposed in Spring 2023 a Reform of the EU Customs Union to equip customs to face these challenges. It is expected that both the Parliament and the Council will adopt their mandates on the customs reform during 2024. In 2024, DG TAXUD will continue supporting the negotiations in the Council and the parallel work in the Parliament.

In 2024, DG TAXUD will contribute to creating a European Ports Alliance to increase the resilience of ports against criminal infiltration in the fight against drugs and drug precursors by reinforcing the work of customs authorities, law enforcement, public and private actors in the ports across the EU. In 2024, DG TAXUD will continue to enhance the enforcement of Prohibitions and Restrictions by Customs, amongst others with the help of the EU Single Window. The enforcement of Prohibitions and Restrictions is a component of the EU Security Union, covering policy domains ranging from Sanitary and Phytosanitary measures to toys safety and environmental measures.

To develop a stronger, fairer and more efficient Single Market, DG TAXUD will continue to push for the swift implementation of the landmark 2-pillar international corporate tax reform, agreed in 2021, which entails the reallocation of taxing rights for the 100 biggest and most profitable multinationals (Pillar One) and the establishment of a minimum effective tax rate worldwide (Pillar Two). In 2024, DG TAXUD will notably propose measures to mirror the OECD work to standardise the information and for a tax administration to perform an appropriate risk assessment. In 2024, DG TAXUD will support the negotiations on the new legislative package for corporate taxation in the EU which was tabled in September 2023. This includes: (1) a proposal for a new, single set of rules to determine the tax base of groups of companies in the EU (Business in Europe: Framework for Income Taxation – BEFIT); and (2) a proposal on transfer pricing which is aimed at achieving a more consistent application of the so-called arm’s length principle, at EU level, in compliance with the most recent OECD transfer pricing guidelines. DG TAXUD will also support the negotiations on the proposal for a Head Office Tax system for SMEs as well as the proposal to strengthen withholding Tax Relief Procedures or to end the abuse of shell companies for tax purposes within the EU. In 2024, DG TAXUD closely cooperating with DG EMPL, will remain in close contact with Member States and other stakeholders to discuss possible ways to address or mitigate the tax implication of cross-border telework and mobile working.

The focus will be on exchange of best practices and knowledge on removing possible barriers to the free movement of workers in the Single Market including, when appropriate, in discussions in combined Council meetings and in line with the initiative of the Belgian Council Presidency to organize a joint EPSCO - ECOFIN Council in March 2024.

Within the ambition to have a carbon neutral continent by 2050, DG TAXUD will continue the dialogue with stakeholders to prepare the definitive implementation of the Carbon Border Adjustment Mechanism (CBAM) as from 2026. In 2024, importers of goods will report on the emissions embedded in imported goods that are within the scope of the regulation. DG TAXUD will notably analyse these data to refine the methodology for declaring the emissions. DG TAXUD will also continue to support the Council negotiations and push for a successful conclusion on the revision of the Energy Tax Directive, proposed in 2021 as an integral part of the Commission’s “Fit for 55” Package.

In 2024, DG TAXUD will also continue to support the Council with the aim to secure an agreement on the VAT in the Digital Age package and start working on its implementation to modernise EU VAT rules for today’s economy, reduce administrative burdens for cross- border businesses and safeguard significant revenues for Member States. This package will also allow to fully exploit data and new technologies to ease VAT procedures for businesses, enhance VAT collection and better tackle VAT fraud.

DG TAXUD will continue to be actively involved in the EU response to the war in Ukraine, reinforcing the EU action against Russia and supporting Ukraine. Customs will remain at the forefront in enforcing the EU sanctions packages. In 2024, DG TAXUD will continue to coordinate closely with EU national customs authorities, the private sector and third countries to this end. DG TAXUD will also continue boosting EU customs cooperation with Ukraine, amongst others by supporting the solidarity lanes.

The Customs and Fiscalis programmes as well as the Customs Control Equipment Instrument (CCEI) have a strong focus on the modernisation and digitalisation of EU

Tax and customs, in line with the EU’s wider priorities. This collaboration directly contributes to the increased effectiveness and efficiency of national administrations and to the coherent and consistent application of EU law across Member States.

In addition, the work of DG TAXUD remains focused on supporting the EU’s highest political priorities, including in other policy fields.

Through both taxation and customs policies, TAXUD will support other key policypriorities such as the Security Union, the Health Union and the Digital Transition. DG TAXUD will also continue to support the Commission’s work on the Recovery and Resilience Facility (RRF), working with Member States on the implementation of the taxation and customs elements of their national plans.

TAXUD will also continue working in close partnership with DG REFORM to assess Member States’ requests for assistance with their reforms, under the Technical Support Instrument.

DG TAXUD has prepared a plan to simplify and rationalise the reporting requirements and reduce related burden on businesses and/or national administrations, without undermining the policy objectives

The plan includes a list of concrete measures planned for 2024 and beyond to progress towards the goal of 25% reduction of such burden. This includes amongst others the following initiatives:

• DG TAXUD is currently negotiating the reform of the Union Customs Code with Parliament and Council. The initiative proposed by the Commission aims to create a single EU Customs interface and facilitate data re-use as well as to simplify and rationalise customs reporting requirements for traders. This includes for example a reduction of the time needed to complete import processes. Overall, this measure should bring around €2 billion in cost savings for traders.
• Also, DG TAXUD is negotiating the initiative that allows SMEs to set up a Head Office Tax System that will give SMEs operating cross-border through permanent establishments and as such the option to interact with only one tax administration – that of the Head Office – instead of having to comply with multiple tax systems. This proposal will increase tax certainty and fairness, reduce compliance costs and distortions in the market that influence business decisions, while minimising the risk of double and over taxation and tax disputes. In the Impact assessment, it is estimated that the HOT proposal could reduce cross-border SMEs’ corporate income tax compliance costs by 32%.
• In 2024, DG TAXUD will also evaluate the existing administrative cooperation framework for direct taxation. Stakeholders made numerous suggestions regarding the reduction of reporting obligations in the context of this framework focusing primarily on the so called DAC6 directive which requires intermediaries to report cross border tax arrangements. The stakeholders ask for clearer reporting requirements and for guidance on the application to avoid over-reporting. Stakeholders also, ask for harmonisation of penalties to avoid distortions on the internal market as well as lower penalties in some cases where current ones are disproportionate. The points raised by the stakeholders will be duly considered in the context of this evaluation. Any action in this domain would then need require an amendment of Directive 2011/16/EU.

This Management Plan highlights the most important deliverables for the year ahead, through which DG TAXUD will deliver on these and other priorities.

READ the Document

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