On April 28, 2016 the European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE 2) organized a workshop on TAXE 2 studies. On June 13, 2016 TAXE 2 published attached analysis was published titled: “International Taxation and Tax Rulings: Policy Issues at Challenging Times". The 4 external experts and authors of the reports: John Vella, Elly van de Velde and Raymond Luja.

Are We Moving in the Right Direction?
Public Disclosure of Tax Information & Other EC/EP Proposals to Reduce Aggressive Tax Planning

“The proposals put forward by the European Parliament and the European Commission to reform the international tax system fall into two categories.The proposals in the first category patch up the existing system, that in the second category is more radical.

The above analysis suggests that reforms in the first category might make a difference to current aggressive tax planning structures, however they will not fix the major flaws of the international tax system.

One particular concern is that they might even intensify competition on corporate tax rates. A long-term stable solution thus requires more radical reform. The European Parliament and the European Commission have put forward one such reform option, the CCCTB. This has clear benefits but also some well-known issues.

For this reason, the search for radical reform solutions ought to be broadened to include the consideration of other options which have been the subject of academic study over the past few years.”

The Future of Tax Rulings in the EU: Evaluation, Confrontation and Recommendations

“The establishment of a common framework at EU level for tax rulings is the ultimate recommendation to achieve the goal of ‘cooperation and coordination of advance tax rulings’.

Transparency is very key in the development of an adequate EU framework, but at the same time one should assure that transparency for citizens does not conflict with the protection of tax secrecy of the assessment procedure.”

EU State Aid Law and National Tax Rulings: 2015-2016 Update

“This author has some reservations in respect to the EP’s recommendation to let the Commission issue new guidelines on what constitutes tax-related state aid or not.

In the end this is the prerogative of the CJEU. It may indeed be useful to have guidelines like these, but only if it can be guaranteed that the Commission will not put forward its own views on unsettled issues as not to harm the procedural rights of either taxpayers or their competitors, as a notice containing such guidelines could give rise to legitimate expectations preventing recovery.

There is also a serious risk of such notice contradicting or not covering past cases, which will raise issues of legal certainty of its own. As for asking the Commission to explain what ‘appropriate’ transfer pricing is, this may go beyond the scope of its state aid powers depending on how detailed this guidance may be.”

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Embrace new technologies and catch up: automate workflow, document management, calendaring and internal controls

Compliant tax software solutions for the global management of tax processes

In essence, HRMC’s increases its expectations towards large businesses with regard to a more and more transparent tax management strategy. However, the publication of a tax strategy will clearly not be sufficient. It is just the starting point for the provision of a clear picture about the risk management and controls in place of tax relevant processes. The daily management turns on the radar.

State-of-the-art tax compliance management software is required.

In difference hereto, the view into the current daily practice provides a different and non-compliant picture:

Widespread use of Excel spreadsheets, decentralized storage of tax relevant documents, lack of documented controls, lack of automation, global lack of tax compliance software tracking individual changes and filings, lack of standardized reports immediately available upon request, lack of in-built double-checks for the calculation of current and deferred taxes on reporting entity level, lots of tax relevant data stored at external outsourcers (e.g. external tax advisors and accounting firms), several tax software tools in place at various locations which are neither interfaced among each other and with the ERP systems in place, etc.

It is obvious that tax departments which are not adapting its process management to the requirements addressed by HMRC and other tax authorities may struggle with regard to compliance, efficiency and transparency.

Therefore, compliant tax software solutions for integrated tax management like the U² software from Universal Units become more and more important

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