Ref. Ares(2017)3026782 - 16/06/2017
EUROPEAN COMMISSION
DIRECTORATE-GENERAL
TAXATION AND CUSTOMS UNION
Direct taxation, Tax Coordination, Economic Analysis and Evaluation
Company Taxation Initiatives
Brussels, 16 June 2017
Taxud D1/
/
/ Ares (2017) 3458448
Meeting Report Code of Conduct Group
8 June 2017
I. EXECUTIVE SUMMARY
1. Dialogue with third countries
a) Switzerland – The Swiss delegation gave a presentation on the progress of
their tax reform efforts to date and underlined their commitment to abolishing
the harmful tax regimes. COM will monitor progress.
b) Liechtenstein - LIE gave a presentation on recent developments in this
jurisdiction on tax reform and took questions from MS. COM was asked to
prepare draft assessments of the identified regimes.
2. External strategy of the EU – Subgroup on third countries – Delegates
discussed and agreed on the way forward for some horizontal issues concerning
the EU screening exercise. The suggestions included in the note by the Chair
have been all endorsed by the group, without any change.
3. Standstill and rollback: Standstill (except patent box regimes)
a) Croatia – The Group will return to this item in July, on the basis of a draft
assessment from COM on the new law which will be passed by the end of June.
b) The Netherlands: Aruba – NL informed the Group that Aruba intended to
repeal the potentially harmful IP regime aspects of their new measure within 3
months. The Group therefore did not discuss the draft assessment.
c) Latvia – The Group agreed not to pursue this matter further due to its de
minimus dimension.
d) Lithuania – Discussion of the recent amendments to the SEZ was closed but
the Group will return to the possible IP aspects of the measure once information
on this is provided by LT.
4. Standstill and rollback: Patent Boxes
a) Rollback – The Group noted progress made by IT and ES, and will continue
to monitor rollback developments for IT, ES, and FR.
b) Standstill – The Italian regime was agreed as not-harmful. ES and FR were
asked to bring their regimes into line as soon as possible. FR noted its recent
change of government would impact progress.
5. Subgroup on the clarification of the third and fourth criteria:
Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel.
+32 22991111
Endorsement of the Draft Guidance Note on Tax Privileges Related to Special
Economic Zones (SEZ) – The guidance was agreed by the Group.
6. Report to the Council (ECOFIN) – after two rounds of comments from MS,
the report to Ecofin was endorsed.
7. Any other business - None.
II. REPORT
1. Dialogue with third countries
a) Switzerland
The Chair presented the background of the dialogue between Switzerland and the
Code Group.
CH then updated the Group on the state of play and way forward on their
commitments based on the Joint Statement. Based on the results of the ongoing
public consultation on the tax reform proposal, a legislative proposal will be
presented to the Parliament in 2018.
. CH also confirmed that the tax
reform will include the abolition of the designated tax regimes.
.
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1 b) Dialogue with third countries - Liechtenstein
The Commission informed the Group that an agreed description of the measures has
been circulated.
Regarding the agreed description of its measures,
LIE made the following
comments:
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2. External strategy of the EU –
Subgroup on third countries
Delegates discussed and agreed on the way forward for some horizontal issues
concerning the EU screening exercise on the basis of the note on the state of play
prepared by the Chair.
3 a) Standstill - Croatia
The Commission made an oral update to the Group on the Investment Promotion Act
measures. The Commission recalled that the assessment was postponed until July
2017 in view of an upcoming amendment to the Act.
Croatia confirmed that the Act should be amended by the end of the 2nd quarter of
2017 and that they would try and meet the agreed deadline.
The Group will return to this item in July, on the basis of a draft assessment from
COM on the new law, which will be passed by the end of June.
3 b) Standstill - Aruba
A draft assessment of Aruba's IP regime was circulated to the Group.
NL provided additional information to the Group on behalf of Aruba. According to
this information, Aruba is in the process of abolishing its IP regime and expects this
process to be completed within three months.
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In response to the question asked by
the Commission,
NL confirmed that Aruba has
been informed of the content of the draft assessment prepared by the Commission
services.
The Chair proposed to monitor these developments closely and reserves the
possibility to come back to the draft assessment if necessary.
3 c) Standstill - Latvia
The Group agreed not to pursue this matter further due to its
de minimus dimension.
3 d) Standstill - Lithuania
The Commission presented the agreed description. Its preliminary view was that the
measure notified under the 2017 standstill exercise (extension of SEZ to certain
specified service activities) does not present any major issue.
.
Lithuanian representative took the floor and further clarified the measure.
.
The
CHAIR concluded that the Group did not see any worrying aspect worth
assessing in respect of the measure notified, while the IP component had to be
further clarified,
and invited LT to provide further information to the Group so that a
full assessment can be made.
Point 4. a) Rollback Patent boxes
The Commission took the floor and informed the Group about recent information
received from Spain and Italy on the amendments made or planned in order to
comply with their rollback obligations. It maintained its overall positive assessment
of the rollback exercise, except as regards the
FR regime.
IT presented statistics on the effects of the IP box (new entrants) and explained the
cut-off date provisions.
BE and DE delegations took the floor to raise the issue of a future monitoring of the
effects of the grandfathering rules.
The CHAIR took note of the good progress made on the rollback and the need to
report it.
.
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Point 4. b) Standstill Patent boxes
French patent box
The Commission briefly presented its draft assessment of the French patent box. It
concluded that its preliminary assessment was that the French regime was harmful.
.
Spanish patent boxes
The Commission presented its draft assessments of the three patent boxes (National,
Basque and Navarra).
.
Spanish representative intervened expressing their intention to amend the regime.
.
Italian patent box
The Commission presented its draft assessment of the Italian patent boxes. It
emphasized
IT's assurance that the Italian IP regime will only grant tax benefits to
eligible IP assets in accordance to the Action 5 BEPS Report and proposed
monitoring on the use, in practice, of the Italian regime.
The Commission concluded that, based on Italy's clarification, its preliminary
assessment was that the Italian regime was not harmful.
As requested by some delegations (
DE, DK), Italy's clarification on its regime was to
be included in the Report to ECOFIN. The
IT regime was agreed as not harmful.
5. Subgroup on the clarification of the third and fourth criteria: Endorsement of the
Draft Guidance Note on Tax Privileges Related to Special Economic Zones (SEZ)
PRES explained the background to the draft guidance on Special Economic Zones
that had been agreed by the subgroup by way of a silence procedure.
CHAIR concluded that there was agreement in the Code Group on the guidance
which would be in annex to the report of the Group to the ECOFIN council.
6. Report to the Council (ECOFIN)
After two rounds of comments from MS, the report to Ecofin was endorsed.
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7. AOB: None
Reported by
Circulation:
, TAXUD D1,
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