During the Czech Presidency, the EU Council will have to deal with several tax regulations that are in various stages of preparation or approval.
According to the Ministry of Finance, the CR will focus on the following tax areas:
- simplifying the tax system and reducing the number of unjustified tax exemptions;
- preparation of an amendment to the Directive on Taxation of Energy Products and Electricity and its adaptation to current climate targets;
- simplifying and modernising VAT rules to reflect the development of digitalisation and fight tax evasion more effectively;
- setting the taxation of the digital economy (OECD Pillar I) and implementing the OECD Global Agreement on Taxing Multinational Enterprises (OECD Pillar II) into the EU legal framework;
- updating the European list of non-cooperative jurisdictions for tax purposes.
The French presidency came close to approving a directive to introduce a 15% minimum income tax for multinational enterprises. Adoption was blocked by Hungary at the last minute, but negotiations to finalise the directive are expected to continue.
Negotiations are also ongoing on an amendment to the Energy Directive, aimed to introduce a new tax rate structure based on the energy content of fuels and electricity and their impact on the environment while also extending the tax base by including more products and removing existing exemptions (e.g., for kerosene used as fuel in the aviation industry and heavy oil used in the maritime industry). However, the current energy crisis has complicated the adoption of this directive, as many member states are concerned about its impact on maintaining EU competitiveness and its consequences for households.
At the same time, the European Commission is finalising the preparation of a directive laying down rules to prevent the misuse of shell entities for tax purposes and a directive on a debt-equity bias reduction allowance. Both may be adopted during the Czech Presidency.