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European Tax Law Center (ETLC)

The WTS Global European Tax Law Centre (ETLC) was launched in 2018 under the leadership of our Belgium member firm Tiberghien, to act as the cutting-edge European tax advisory centre for international WTS clients.

The ETLC is headed by Koen Morbée, Tax Partner at Tiberghien, and consists of further highly renowned EU Law experts from amidst WTS Global member firms across Europe. The ETLC team also counts with Bernard Peeters, Tax Partner at Tiberghien and Director of the WTS Global Board, who has been appointed for the Belgian list of independent persons of standing who will form part of the Advisory Commission for dispute resolution, as stated in Council Directive 2017/1852, on tax dispute resolution mechanisms in the European Union.

Inés Blanco, who is part of the WTS Global Central Team and also has a law background, is responsible for coordination.

The continuous substantial changes in EU (tax) law combined with an active European Court of Justice (ECJ), which has ruled in more than 300 corporate tax cases since Avoir Fiscal, gave rise to setting up an integrated European team consisting of highly experienced European tax law practitioners with a proven track record. The ETLC group is fully dedicated in supporting our WTS member firms as well as identifying opportunities and risks for our clients. The group will pro-actively inform and filter the most relevant EU court decisions, provide background information and interpretations on EU developments and give clear direction and guidance on how these developments will affect the business of our clients

WTS ETLC Team

By setting up the ETLC, we will help our clients navigate through the complex European tax law developments and continue on our path to build a leading global tax practice, whereby the bundling of our expertise plays an indispensable part” - Wim Wuyts, CEO WTS Global

The ETLC covers a wide range of topics, including:

EU (case) law and legislation on corporate and individual income tax
State aid and tax law
Protection of fundamental rights

The ETLC aims to help to understand the complexities of EU tax law and how this can impact your business, enabling you to better predict how rules will develop and how to leverage opportunities and minimize risks arising from EU tax law.

EU law is taking an increasingly centre stage position in the EU tax world. Whether it is a decision of the EU Court of Justice, a new cross-border tax regulation, or an investigation launched by the European Commission, businesses can no longer ignore its consequences. The EU Tax Centre is here to meet that need.

Since the beginning of 2019, the OECD/G20 Inclusive Framework has been working on a consensus-based approach to address the challenges of the digitalization of the economy, which was identified as one of the main areas of focus of the Base Erosion and Profit Shifting ("BEPS") Project.

The tax work of the OECD/G20 Inclusive Framework on BEPS regarding the digitalization of the economy has culminated in two proposals for each of the "pillars":

The Pillar One proposal focuses on the reallocation of taxing rights with the aim of undertaking a coherent and concurrent review of profit allocation and nexus rules. Pillar One will apply to large multinational companies and will have an influence on their effective tax rate and cash tax obligations. In October 2021, over 135 members of the Inclusive Framework on BEPS reached an agreement on the implementation of the two-pillar plan. For Amount A of Pillar One, the first public consultations started in February 2022. A public consultation will begin in mid-2022 for Amount B of Pillar One.

The so-called "Pillar Two" is a revolutionary tax system that will apply with uniform effect worldwide. It is designed to ensure that multinational enterprises pay a minimum tax of 15% on the local income arising in each jurisdiction where they operate. Those rules are expected to enter into effect on December 31st, 2023. In December 2022, the European Commission published a legislative proposal for a Directive on the implementation of the principles developed by the OECD at European level.

Here you can read more about Pillar II and how WTS Global can help your company prepare for those changes.

Directive 2018/822/EU amending (for the sixth time) Directive 2011/16/EU as regards the mandatory automatic exchange of information in the field of taxation of reportable cross-border tax arrangements ("DAC 6") entered into force on 25 June 2018. The transposition into national law by the EU Member States was due on 31 December 2019.

The main goal of the Directive is to provide tax authorities with an early warning mechanism on new risks of tax avoidance and thereby enable them to carry out audits more effectively, with the final objective of improving the functioning of the internal market by discouraging the use of aggressive cross-border tax-planning arrangements

The reporting obligation applies not only to tax advisors (so-called intermediaries), but also to the taxpayers themselves.

The Directive states that cross-border arrangements that meet certain “hallmarks” must be reported electronically to the respective tax authorities of the EU Member States. In principle, the reporting obligation to the tax authorities begins on 1 July 2020 (in Poland, however, the reporting obligation has already been in force since the beginning of 2019). However, cross-border tax arrangements must also be reported in case the first step of such a tax arrangements was implemented between 25 June 2018 and 30 June 2020 (so called retrospective reporting obligation). The first reports are due in August 2020*.

*Important update: On the 8th of May 2020, the European Commission published a Proposal for a Council Directive amending Directive 2011/16/EU to address the urgent need for deferring certain time limits for the filing and exchange of information in the field of taxation due to the COVID-19 pandemic. The Directive proposes changes to certain time limits for filing and exchanging information under Council Directive 2011/16/EU, more specifically concerning information on financial accounts as provided by Council Directive 2014/107/EU and reportable cross-border arrangements as provided by Council Directive 2018/822/EU.

The proposed rules:

Defer the time limit for exchanges of information on Reportable Financial Accounts by 3 months, i.e. until 31 December 2020;
Change the date for the first exchange of information on reportable cross-border arrangements that feature in Annex IV to Council Directive 2011/16/EU from 31 October 2020 to 31 January 2021;
Change the date for the beginning of the period of 30 days for reporting cross-border arrangements which are included in Hallmarks listed in Annex IV to Council Directive 2018/822/EU from 1 July 2020 to 1 October 2020;
Change the date for the reporting of the ‘historical’ cross-border arrangements (i.e. arrangements that became reportable from 25 June 2018 to 30 June 2020) from 31 August 2020 to 30 November 2020.

Documents of Interest:

WTS Global DAC 6 Executive Summary

Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements

Council Directive 2011/16/EU of 15 February 211 on administrative cooperation in the field of taxation (consolidated text)

Proposal for a Council Directive amending Directive 2011/16/EU deferring certain time limits for the filing and exchange of information

For more information, please visit the DAC 6 section in the WTS website:

DAC 6 - Reporting obligations for tax planning

On July 15, 2020 the European Commission published a proposal to amend the DAC in order for it to address the challenges posed by the digitalization of the economy. This Proposal of DAC 7 is largely based on the OECD model rules of reporting for platform operators with respect to sellers in the sharing and gig economy (the “OECD Model Reporting Rules”).

DAC 7 was approved by the EU Council on 22 March 2021 and Member States will need to implement the new provisions by December 2022.

The characteristics of the digital platform economy, specially in a cross-border context, has created a regulatory gap that causes a shortfall of Member States’ tax revenues and provides the users of the digital platforms with an advantage compared to service providers and sellers who are not active on digital platforms. The goal of the DAC 7 is to cover this gap to ensure fair taxation.

Therefore, the DAC 7 foresees a reporting obligation for any Platform Operator that can be located in an EU member state, by any of the common methods, and it includes a catch-all-clause for the rental of immovable property. The Proposal states that any Platform Operator that facilitates the rental of immovable property in an EU member state has a reporting obligation, regardless of the aforementioned criteria on allocation. This reporting obligation encloses information on the income derived via the platforms by the Sellers and the amounts paid by other users.

In order to catch as many digital transactions as possible under its scope, the proposal establishes broad definitions for both a Platform and a Platform Operator. A Platform is described as: “any software that allows Sellers to be connected to other users” and a Platform Operator is defined as: “any entity that allows Sellers access to the platform”. However some software is explicitly excluded from the scope (e.g. software to process payments, advertising software and - contrary to the OECD Model Reporting rules - also software to redirect users).

The targeted services are broader than those in the OECD Model Reporting Rules: not only are Platform Operators obliged to report on rental of immovable property and personal services (providing transport or delivery) but also on the sale of goods, rental of any mode of transport, investing and lending in the context of crowdfunding as on income from royalties.

The obligation that is put on the Platform Operator implies that they must perform due diligence on the Seller: they must not only collect information on the Sellers on their platform, but also determine the reliability of the information. This obligation must be met while complying with the GDPR. Therefore the Platform Operator needs to accurately inform each individual Seller and user on his digital platform about this collecting and reporting of their information to the competent authorities.

The Platform Operator must file the reported information within one month of the end of a reportable period (i.e. January 31 of the year following the reporting period) with the competent authority of the EU member state. These authorities will exchange the reported information within two months after the end of a reporting period.

This proposal was approved by the Council of the European Union on 22nd March 2021. As a consequence, the so-called DAC 7 introduces the following amendments:

Expands reporting obligations and exchange of information to cover sales through digital platforms. These rules would apply from 2023.
Amends the actual exchange of information and cooperation between EU member states, focusing on joint actions and joint audits. These rules would apply from 2024

Several EU Member States have already adopted domestic measures imposing reporting obligations to digital platforms. You can find an overview here.

The proposal for DAC 7 was part of a publication of the EC called “A Package for Fair and Simple Taxation to help EU member states with their economic recovery (referring to the economic damage caused by the COVID-19 pandemic)”. This package already hinted at a new future amendment of the DAC, namely DAC 8. The goal of this amendment is to expand the scope of the directive with alternative means of payment and investment, such as crypto-assets and e-money. A proposal on this amendment has yet to be published.

This publication is planned for the third quarter of 2021. For now the initiative is open for feedback of the public. The feedback period opened at November, 23rd and will close on December 21st.

Council Directive 2017/1852 of 10 October 2017 laid down new rules on tax dispute resolution aiming to improve the resolution of tax disputes, as they ensure that businesses and citizens can resolve disputes related to the interpretation and application of tax treaties more swiftly and effectively. These new rules apply since 1 July 2019 and they also cover issues related to double taxation.

In case the dispute is not resolved with a MAP ("Mutual Agreement Procedure") between competent authorities, the taxpayer can request to set up an Advisory Commission. The Advisory Commission is composed of the competent authorities of the Member States in dispute and three independent persons (one of whom acts as the Chair). These persons are drawn from a purpose-compiled list to which they get nominated by Member States in accordance with the Directive. Bernard Peeters, Director of the WTS Global Board and Tax Partner at Tiberghien has been appointed for the Belgian list of independent persons of standing who will form part of the Advisory Commission.

The Advisory Commission delivers its opinion within 6 months and such opinion is then notified to the competent authorities of the Member States concerned, who make a final decision. If they do not manage to agree a final decision on time, the opinion becomes binding on the competent authorities.

Relevant material:

WTS Articles:

Publications by the ETLC

The Spanish government has recently published the draft State General Budget for 2023 which includes several relevant tax modifications.

Key tax measures introduced by Spain’s General Budget for 2023

On October 24, 2022, the Netherlands published the draft bill on Pillar Two called ‘Minimum Tax Rate Act 2024’ (news item). This draft bill is open for public consultation until December 5, 2022.

The Netherlands: Draft bill to implement Pillar Two rules

An Austrian Fiscal Court (BFG) decision, which referred to ECJ case law, has held that the Austrian group tax regime’s limitations conflict with EU fundamental freedoms. If the BFG ruling is confirmed by the Austrian Supreme Administrative Court (VwGH), then a substantial easing in forming Austrian tax groups within multinational enterprises could be ahead.

Are lower entry barriers on the horizon for multinational groups in the Austrian group tax regime?

This newsflash describes the status and evolution of the tax treatment of dividends across the EU, including the legislative developments that are underway in certain Member States.

Withholding tax on dividends - current status in some Member States

On 11 May 2022, the European Commission published a proposal for a Directive providing for a debt-equity bias reduction allowance (‘DEBRA’). This directive is part of the Commission’s proposed measures to support Europe’s recovery from the COVID-19 pandemic.

A proposal for a Directive on debt-equity bias reduction allowance (DEBRA)

On 17 March 2022, the European Court of Justice (“ECJ”) has issued a preliminary ruling on Case C-545/19 (AllianzGI-Fonds AEVN)

ECJ landmark decision in the case C-545/19 (AEVN) dated 17 March 2022

On 15 March 2022, Ministers of the EU Economic and Financial Affairs Council (ECOFIN) failed to reach an agreement on the proposed Pillar Two Directive. While most Member States are supportive of the proposed Pillar Two Directive, Estonia, Malta, Poland and Sweden expressed reservation concerning certain issues.

Poland blocks EU adoption of the Global anti-Base Erosion (GloBE) model rules

On 22 December the European Commission published a proposal for a Directive to prevent the misuse of shell entities in cross-border situations. The proposal contains model rules that should ensure that shell entities in the EU that have no or minimal substance are unable to benefit from certain tax advantages.

The ATAD3 Directive -The crackdown on EU ‘Shell entities - ETLC Newsflash #27

An important decision on the characterization of a permanent establishment in France has been rendered by the French Supreme Administrative Court (Conseil d’Etat) in the Conversant International Ltd case (CE, 11 December 2020, n° 420174).

France: Continuation and end of the Conversant International Ltd case - Permanent establishment in the digital field

The Pillar Two Model Rules and the EU Directive proposal to implement them have been published. This initiative aims to ensure that from 2023, Multinational Enterprises (MNEs) will be subject to a 15% global minimum tax rate.
Our WTS Global experts have written an overview to provide insight into this groundbreaking matter.

OECD publishes Pillar Two Model Rules for Domestic Implementation of 15% Global Minimum Tax

The European Commission has started an initiative to introduce a common EU-wide system for withholding taxes on dividend or interest payments.

New EU system to avoid double taxation for withholding taxes

The French research tax credit (“CIR”) has undergone several changes recently, as a result of new French Supreme Court case law, the 2021 Finance Act and the updating of tax authorities guidelines.

France: An overview of recent news regarding the research tax credit (CIR)

The Italian measures adopted in connection with the COVID-19 pandemic include specific rules concerning the Regional Tax on Production Activities (IRAP) payment.

Covid-19 measures: waiver of the Italian regional tax on production activities

On 18 May 2021, the European Commission (“EC”) published its long-awaited Communication on Business Taxation for the 21st Century (the “Communication”).

The European Commission’s view on business taxation in the 21st century - ETLC Newsflash #23

On 12 May 2021, the EU General Court delivered two judgements relating to appeals made against the EU Commission’s decisions taken back in 2017 and 2018.

EU General Court judgements: Engie received illegal state aid, Amazon did not - ETLC Newsflash #22

Germany’s highest tax court, the Bundesfinanzhof (BFH), has filed a preliminary ruling request to the Court of Justice of the EU (CJEU). The request comprises five questions relating to the concept of “final losses”.

The German Federal Tax Court has filed a preliminary ruling request on “final losses” - ETLC Newsflash #21

On 16 March 2021, the CJEU upheld the European General Court’s judgments Commission vs. Poland and Commission vs. Hungary, which had ruled that the Polish tax on the retail sector and the Hungarian tax on advertisements did not infringe EU law on State aid.

CJEU rules that Hungarian and Polish progressive taxes on turnover do not violate EU State aid rules - ETLC Newsflash #20

The European Commission has started infringement procedures in several countries of the EU arguing that their levying of withholding tax on investment income received by foreign insurance companies has resulted in an unequal treatment of these companies.

EU Commission challenges Belgian and French (withholding) taxes on investment income received by foreign insurance companies - ETLC Newsflash #19

The Portuguese withholding tax provisions consist of a difference in treatment between resident and non-resident investment funds, which has been brought before national courts and the ECJ. Some Portuguese courts have already ruled that there is indeed a breach of EU law.

WHT applicable to dividends obtained in Portugal by EU investment funds: a breach of EU law? - ETLC Newsflash #18

The recent ECJ decision of March 3rd, 2021 (case C-220/19, Promociones Oliva Park, S.L.) brings to an end the long-lasting controversy on the compatibility with EU Law of the Tax on the Value of Electricity Generation.

The European Court of Justice endorses the Spanish tax on electricity generation - ETLC Newsflash #17

In the Lexel case, the European Court of Justice concludes that the so-called “10% rule” of the former Swedish interest deduction limitation rules is incompatible with EU law

The CJEU rules against the Swedish interest deduction limitation rules - ETLC Newsflash #16

On 12 October 2020 the OECD/G20 Inclusive Framework on BEPS invited public input on the Reports on Pillar One and Pillar Two Blueprints. Interested parties could submit their comments up until 14 December 2020.

Tiberghien comments on the OECD Blueprints on Pillar One and Pillar Two

The French Administrative Supreme Court (“Conseil d’Etat”) ruled that the tax provided for in Article 244 bis B of the French Tax Code (FTC) due by EU resident companies on long-term capital gains relating to a substantial shareholding (25%) in a French company violate EU law and more particularly the freedom of establishment.

The tax on long-term capital gains from the sale of French shareholdings by EU companies is contrary to EU law

The “DAC 7” proposal will introduce, amongst other, reporting obligations for digital platform operators and the automatic exchange of the reported information between Member States.

ECOFIN reaches agreement on DAC 7 - ETLC Newsflash #15

The Spanish Supreme Court decides on the limitations of the application of dynamic interpretation of double taxation agreements.

Interpretation of double tax agreements: static or dynamic? - ETLC Newsflash #14

In recent years, Austrian entrepreneurs have often chosen the British "Limited Company" ("Ltd.") as a legal form for their business activities. The Ltd. was formally registered in the UK, but its place of management and its business activities are in Austria.

Brexit: need for action for British Limited companies with a place of management in Austria - ETLC Newsflash #13

Recent case law across Europe shows that domestic courts are being inspired by the CJEU case law on abuse. In this newsletter we have summarised recent case law in Switzerland, France, Spain, the Netherlands and Italy.

Latest case law from EU member states on beneficial ownership and abuse of law - ETLC Newsflash #12

July 2020

The European Court of Justice to rule on the Spanish tax on electricity production

The CJEU to rule on the Spanish tax on electricity production - ETLC Newsflash #11

Communication from the European Commission

Europe´s Moment: Repair and Prepare for the Next Generation

June 2020

The EU allows to postpone the DAC 6 deadlines.

Deferral of DAC6 deadlines due to COVID-19 - ETLC Newsflash #10

May 2020

The European Court of Justice rules in favour of the Italian FTT in case C-565/18, Société Générale of April 2020

The ECJ takes positive decision on Italian FTT - ETLC Newsflash #9

April 2020

Exemption from withholding tax on dividends paid by a French company to a non-resident company - ETLC Newsflash #8

April 2020

See how each Member State implements local rules during the transition period.

Impact of Brexit on cross-border payments during the transition period: Country overview - ETLC Newsflash #7

April 2020

An Austrian perspective on intermediary holding companies and withholding tax relief - ETLC Newsflash #6

April 2020

The ECJ rules in favour of Hungarian progressive turnover taxes - ETLC Newsflash #5

March 2020

First implementation of the “Danish cases” doctrine in the Spanish administrative case-law - ETLC Newsflash #4

March 2020

The ECJ rules that freedom of establishment does not guarantee that the change of a company’s tax residence will be tax neutral - ETLC Newsflash #3

March 2020

On 30 January 2020, the European Court of Justice (“ECJ”) issued its judgement in the case of the German investment fund Köln Aktienfonds Deka (“KA Deka”).

The Deka case: withholding tax on dividends paid to foreign investment funds - ETLC Newsflash #2

DAC 6 imposes mandatory reporting by intermediaries or, in certain circumstances, taxpayers, of reportable cross-border arrangements.

DAC 6: EU tax disclosure rules - Executive Summary

February 2020

WTS Global files a complaint with the EC against the Italian Supreme Court’s case law on the Parent-Subsidiary Directive - ETLC Newsflash #1

The directive ensures that all EU Member States share the same supervision of intermediaries’s activities and that they cooperate in preventing aggressive cross-border tax planning

New EU transparency rules for intermediaries involved in cross border tax planning

European Tax Law Centre (ETLC) will be headed by Koen Morbée, Tax Partner at Tiberghien

WTS Global creates cutting-edge European Tax Law Centre in Brussels

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