What is the June news in the area of double taxation treaties? What changes is the Spanish government planning regarding real estate taxation? What developments in the area of direct taxation have the past six months brought through the eyes of the Council of the EU? You can read the answers to these questions and more in the following article.
In June, there was another shift in the area of international double taxation treaties to which the Czech Republic is a party:
ECOFIN report on tax issues for the first half of 2025
In its report of 20 June 2025, the ECOFIN Council reports on the development of legislation and agenda in the area of direct taxation for the first half of 2025. Below is an overview of the main points:
The ECOFIN Council formally adopted an amendment to the Directive on Administrative Cooperation in the field of taxation (DAC 9) on 14 April 2025. The amendment introduces, among other things, a standardized form for top-up taxes based on the OECD model and allows centralized filing within the EU. The directive was published in the EU Journal on 6 May 2025.
After unsuccessful efforts to reach an agreement among the Member States, it was decided in May 2025 to terminate the discussion of the draft directive against the misuse of the so-called shell companies. The objectives of the proposal should be reflected in the upcoming modifications to DAC6, which the Commission is considering on the basis of the ongoing comprehensive review of the functioning of the International Cooperation Directive.
Discussions on the transfer pricing proposal presented in September 2023 have not yet led to progress. Nevertheless, Member States support the intention to reduce the administrative burden and transfer pricing costs.
The proposal for the BEFIT Directive, which is intended to bring a single set of rules for determining the tax base of groups of companies operating in the EU, was not further discussed in the first half of 2025. The Polish Presidency focused on other priorities, in particular DAC9 and the agenda of simplifying tax legislation.
Sweden: Consulting costs aimed at improving a company’s efficiency may be tax deductible even if they are related to a planned sale of a stake in that company
The Swedish Supreme Administrative Court dealt with the issue of tax deductibility of expenses and the right to deduct VAT for consulting services that the parent company re-invoiced to its subsidiary. The advice concerned streamlining the subsidiary’s operations and improving its profitability before the planned sale. It is interesting to note that the remuneration of the consulting company, which delivered the advice according to the order of the parent company, was partly linked to the amount of the sale price achieved for the share in the subsidiary.
The lower administrative courts and the tax administrator rejected the tax deductibility and deduction of input VAT, arguing that the costs were related to the sale of the ownership share (i.e. the income of the parent company), not to the ordinary business of the subsidiary.
The Supreme Administrative Court reversed this conclusion and stated that the consulting services were closely linked to the subsidiary’s business and were intended to increase its cost-effectiveness and reduce operating costs, which is considered to be expenses incurred to achieve and maintain income. The fact that these activities could also increase the value of the company does not exclude their tax deductibility. The court therefore granted the company the right to deduct costs and claim the related VAT.
Spanish tax package to solve local housing crisis
The Spanish government has introduced a bill that aims to address the growing housing crisis and promote the availability of rental housing through tax measures. The key point is the introduction of a new tax of up to 100% of the market value of the property for buyers from countries outside the EU, with the possibility of deducting the real estate transfer tax already paid. At the same time, the bill contains tax deductions from net rent for landlords who reduce rents by at least 5% compared to a previous contract or offer rents below a limit set by the government. The amount of deductions can reach up to 100%, for example, if it concerns properties in areas with high demand or tenants aged 18-35.
Other proposed measures include increasing the progressive taxation of income from unused real estate up to 3% of the market value of real estate with a total market value of more than €1 million. VAT on short-term tourist rentals (up to 30 days) in municipalities with more than 10,000 inhabitants will increase from 10% to 21%. The tax rate on retained earnings of real estate investment companies (SOCIMI/REIC) will also increase from 15% to 25% if they come from rental housing. This rate can be reduced by up to 50% if more than 60% of the portfolio (with gradual increases from 20% in 2025 to 60% in 2028) is made up of affordable housing.
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