State aid: Commission refers Ireland to Court for failure to recover illegal tax benefits from Apple worth up to €13 billion
The European Commission has decided to refer Ireland to the European Court of Justice for failing to recover from Apple illegal State aid worth up to €13 billion, as required by a Commission decision. The Commission decision of 30 August 2016 concluded that Ireland’s tax benefits to Apple were illegal under EU State aid rules, because it allowed Apple to pay substantially less tax than other businesses. As a matter of principle, EU State aid rules require that illegal State aid is recovered in order to remove the distortion of competition created by the aid. The deadline for Ireland to implement the Commission’s decision on Apple’s tax treatment was 3 January 2017 in line with standard procedures, i.e. four months from the official notification of the Commission decision. Until the illegal aid is recovered, the company in question continues to benefit from an illegal advantage, which is why recovery must happen as quickly as possible. Commissioner Margrethe Vestager, in charge of competition policy, said “Ireland has to recover up to 13 billion euros in illegal State aid from Apple. However, more than one year after the Commission adopted this decision, Ireland has still not recovered the money, also not in part. We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But Member States need to make sufficient progress to restore competition. That is why we have today decided to refer Ireland to the EU Court for failing to implement our decision.” The full press release is available online in here
European Commission proposes far-reaching reform of the EU VAT system
The European Commission has today launched plans for the biggest reform of EU VAT rules in a quarter of a century. The reboot would improve and modernise the system for governments and businesses alike. Overall, over €150 billion of VAT is lost every year, meaning that Member States miss out on revenue that could be used for schools, roads and healthcare. Of this, around €50 billion – or €100 per EU citizen each year – is estimated to be due to cross-border VAT fraud. This money can be used to finance criminal organisations, including terrorism. It is estimated that this sum would be reduced by 80% thanks to the proposed reform. The proposed VAT reform would also make the system more robust and simpler to use for companies. The Commission wants a VAT system that helps European companies to reap all the benefits of the Single Market and to compete in global markets. Businesses trading cross-border currently suffer from 11% higher compliance costs compared to those trading only domestically. Simplifying and modernising VAT should reduce these costs by an estimated €1 billion. For further details, see the press release and MEMO, which will be available following the Commissioner’s press conference.
EUROSTAT Second quarter of 2017 – EU28 current account surplus €41.9 bn – €39.5 bn surplus for trade in services
The EU28 seasonally adjusted current account of the balance of payments recorded a surplus of €41.9 billion (1.1% of GDP) in the second quarter of 2017, down from a surplus of €49.4 billion (1.3% of GDP) in the first quarter of 2017 and from a surplus of €58.6 billion (1.6% of GDP) in the second quarter of 2016, according to estimates released by Eurostat, the statistical office of the European Union. Full text available here
State aid: Commission finds Luxembourg gave illegal tax benefits to Amazon worth around €250 million
The European Commission has concluded that Luxembourg granted undue tax benefits to Amazon of around €250 million. This is illegal under EU State aid rules because it allowed Amazon to pay substantially less tax than other businesses. Luxembourg must now recover the illegal aid. Following an in-depth investigation launched in October 2014, the Commission has concluded that a tax ruling issued by Luxembourg in 2003, and prolonged in 2011, lowered the tax paid by Amazon in Luxembourg without any valid justification. The tax ruling enabled Amazon to shift the vast majority of its profits from an Amazon group company that is subject to tax in Luxembourg (Amazon EU) to a company which is not subject to tax (Amazon Europe Holding Technologies). In particular, the tax ruling endorsed the payment of a royalty from Amazon EU to Amazon Europe Holding Technologies, which significantly reduced Amazon EU’s taxable profits. The Commission’s investigation showed that the level of the royalty payments, endorsed by the tax ruling, was inflated and did not reflect economic reality. On this basis, the Commission concluded that the tax ruling granted a selective economic advantage to Amazon by allowing the group to pay less tax than other companies subject to the same national tax rules. Commissioner Margrethe Vestager, in charge of competition policy, said “Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon’s profits were not taxed. In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules. This is illegal under EU State aid rules. Member States cannot give selective tax benefits to multinational groups that are not available to others.” The full press release is available in all languages online.
Commission welcomes agreement on new anti-dumping methodology
The negotiators of the European Parliament and the Council reached yesterday an agreement on the Commission’s proposal of November 2016 to change the EU’s anti-dumping and anti-subsidy legislation. The key change is to introduce into EU legislation a new methodology for calculating dumping margins for imports from third countries in case of significant market distortions or a pervasive State’s influence on the economy. The changes will enable Europe to deal with current realities – notably overcapacities – in the international trading environment, while fully respecting the EU’s international obligations in the World Trade Organisation (WTO). Following the yesterday meeting in Strasbourg, President Jean-Claude Juncker said: “Europe stands for open and fair trade, but as I have said time and again, we are not naïve free traders. That’s why we have to make sure that, while upholding the multilateral, rules-based trade system, our legislation allows us to ensure that our companies operate on a level playing field. This is not about any country in particular, simply about making sure that we have the means to take action against unfair competition and the dumping of products in the EU market that leads to the destruction of jobs.” Commissioner for Trade Cecilia Malmström said: “We believe that the changes agreed today strengthen EU’s trade defence instruments and will ensure that our European industry will be well equipped to deal with the unfair competition from dumped and subsidised imports now and in the future. Having a new methodology in place for calculating dumping on imports from countries which have significant distortions in their economies is essential to address the current trade realities.” The new methodology is expected to enter into force before the end of the year. For more information see the press release and a factsheet available online. .
Cybersecurity and e-governance in focus on the Eastern Partnership Ministerial meeting and conferences
Today’s e-Partnership Conference starts a series of events in Tallinn, Estonia dedicated to e-governance aimed at developing e-governance and enhancing cybersecurity in the EU’s Eastern partner countries. The second Eastern Partnership Ministerial meeting on the digital economy will take place tomorrow and the EU’s Ministerial e-Government Conference on Friday. Today’s e-Partnership Conference will bring together more than 150 experts and policy makers from Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine as well as the EU Member States. The participants will discuss how Eastern Partnership countries are using information and communications technology to increase the transparency of government processes. Vice-President for the Digital Single Market, Andrus Ansip, who will represent the Commission in Tallinn, said ahead of the events: “The EU continues to work closely with its Eastern partners in the digital area, focusing on promoting high-speed broadband internet to boost economies and expand e-services, creating more jobs in the digital industry and reducing roaming tariffs among the Eastern partner countries. Using digital solutions brings efficiency and transparency to governance and benefits to citizens.” On Thursday, during the second Eastern Partnership Ministerial meeting the Ministers will sign a declaration on digital economy between the EU and the Eastern Partnership countries. The declaration is expected to include a commitment of all parties to deepen their cooperation in six priority topics: electronic communications and infrastructure, trust and security, eTrade, digital skills, ICT innovation, and startup ecosystems and eHealth. The working week will be closed on Friday with the EU’s Ministerial e-Government Conferencewhere EU and EFTA Ministers will discuss further measures to ensure successful digital transformation of governments. Read more here.
Commission appoints Ms Joëlle Milquet as Special Adviser for the compensation of victims of crime
Ms Joëlle Milquet has been appointed Special Adviser to President Jean-Claude Juncker for the compensation of victims of crime. Her mandate will be to advise the President on how the Commission can foster a better implementation of the existing rules on the compensation of victims of crime, including victims of terrorism. Compensation for victims is often hindered by the complexity and diversity of the national compensation schemes, including the differences in compensation payments across Member States. Ms Milquet will be focusing on how to improve cooperation among national authorities responsible for the compensation of victims of crime, on access to information in cross border situations and on possible options for a faster and more fair compensation across the EU. Ms Milquet has extensive policy and political experience at national, regional and local levels in Belgium as well as specific expertise in the area of justice and human rights. Currently Chair of the Security Committee of Brussels’ Regional Parliament, between 2014 and 2016 Ms Milquet was a Vice Minister-President and Minister for Education and Culture in the Government of the French Community. Between 2011 and 2014, Ms Milquet was a Deputy Prime Minister of Belgium and an Interior Minister also in charge of Diversity and Equal Opportunities. From 2008 to 2011, she served as a Deputy Prime Minister and Minister for Labour, Migration and Equal Opportunities. Ms Milquet will not be remunerated for her part-time role. Her full CV is available online.
October infringements package: key decisions
In its monthly package of infringement decisions, the European Commission (‘Commission’) is pursuing legal action against Member States for failing to comply with their obligations under EU law. These decisions, covering various sectors and EU policy areas, aim to ensure the proper application of EU law for the benefit of citizens and businesses. More information here
Statement following the European Parliament’s vote regarding the Commission’s proposal for the identification of criteria defining endocrine disruptors in the area of plant protection products (PPPs)
Commissioner Andriukaitis regrets today’s vote in the European Parliament. He strongly believes that in this case no deal is a bad deal for EU citizens. The Parliament decided to stop the adoption of scientific criteria which would have ensured better protection of human health and the environment as well as served as a stepping stone to a wider strategy on endocrine disruptors.Today’s vote means that the scientific criteria put forward by the Commissionthat had been supported by Member States in early July after months of thorough discussions cannot be adopted. The Commission will now need to reflect on next steps to take. The statement is available online here.
Our Ocean: The European Union hosts international conference in Malta to generate global action for safe, secure and healthy oceans
The European Union will host the fourth edition of the Our Ocean Conference in Malta, on 5 – 6 October 2017. The Our Ocean Conference aims to inspire joint solutions and gather ambitious commitments to conserve and sustainably use the oceans. More than 40 ministers and other leaders from more than 100 countries across the globe and several top managers from international companies are expected to attend the meeting and to announce substantial and concrete pledges. On behalf of the EU, High Representative / Vice-President Mogherini and Commissioner Vella will be co-hosting the event, in the presence of First Vice-President Timmermans and Commissioner Mimica. Significant resources will be committed to strengthen the fight against marine pollution and enlarge protected areas, reinforce security of the oceans, foster blue economy initiatives and sustainable fisheries and intensify the EU efforts against climate change, in line with the Paris Agreement and the Sustainable Development Goals under Agenda 2030. Our Ocean 2017 has already attracted over 200 commitments and counting, including from more than 50 companies, ranging from the traditional fisheries sector to the Silicon Valley high-tech industries. The Conference will be web streamed live here.