In Brief from International Taxation [March 2022]

We bring you the latest news from international taxation, including the information that the Belgian financial administration presented a transfer pricing tax audit plan for 2022, or that according to the Court of Justice of the EU, the Spanish information obligation in respect of assets and rights held in other member states of the EU or EEA represents a breach in the free movement of capital.

European Commission: Taxation management plan 2022

On 7 March 2022, the European Commission released the taxation Management Plan 2022. The main steps of the plan are in the line with the previously published Commission Work Program 2022. The five main priorities of the Directorate General for Taxation and Customs Union stated in the plan are: 1) Implementation of a corporate tax reform; 2) support of the EU Green Deal; 3) reform of the Customs Union; 4) protection of the EU’s financial interests and 5) modernisation of tax and customs administration.

OECD: February 2022 report to G20

On 18 February 2022, the OECD Secretary-General published a Tax Report presented to the G20 finance ministers and central bank governors that provides updates on topics including the work of the G20/OECD Inclusive Framework on BEPS on a “two-pillar” approach to address the tax challenges arising from the digitalisation of the economy. The report also provides an update on the implementation of BEPS, tax transparency developments and progress made in supporting developing jurisdictions to build sustainable tax revenue bases.

Belgium: Transfer pricing tax audit plan for 2022

The Belgian tax authorities’ national transfer pricing (TP) audit team has launched the 2022 TP audit cycle. Companies subject to the TP tax audit in 2022 will be selected based on the outcome of a risk assessment analysis performed by the tax authorities’ “MANTRA” software. In the selection process, compliance with the Belgian documentation requirements will be considered. A higher risk of being selected for a TP tax audit may occur, if: no or an incomplete or incorrect TP form has been filed or the TP form filing has been delayed. In contrast with the previous years, the selected companies will be first invited to a pre-audit meeting the aim of which is to receive an overview of the company’s operation.

Spain: Disclosure obligations violate a free movement of capital ruled the CJEU

The Court of Justice of the European Union (CJEU) ruled in case C-788/19 as of 27 January 2022 that assessing of 150 % of the additional tax and flat-rate penalties for non-compliance or partial or late compliance with the obligation to provide tax authorities with the information in respect of assets and rights held in other member states of the EU or EEA are disproportionate and do not guarantee the free movement of capital, constituting a breach of Article 63 of the Treaty on the Functioning of the European Union and Article 40 of the Agreement on the European Economic Area, since it establishes a difference in treatment between Spanish residents according to the location of their assets.

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