COVID19 - The European Commission proposes the postponement of certain tax rules
In a Press Release issued on the 8th of May 2020, the European Commission (EC) proposed to the Member States the postponement of the entry into force of two EU taxation measures in response to the difficulties that businesses and Member States are currently facing due to the Covid19 pandemic. The proposed deferrals are as follows:
1. EU common reporting standard (CRS) reporting deadline
Concerning what is referred to as DAC2 - the cooperation between EU tax authorities to automatically exchange financial account information which was together with CRS, transposed into Maltese legislation by virtue of LN 384 of 2015 entitled the Cooperation with Other Jurisdiction on Tax Matters (Amendment) Regulations, 2015 and which entered into effect from 1st January 2016, the EU is proposing a deferral of the time limit for exchanges of information on “reportable financial accounts” by three months.
In this regard, the Malta Commissioner for Revenue had already extended such reporting deadline to 30 June for 2019 reporting.
2. Directive on Administrative Cooperation in the Field of Taxation - DAC6 reporting obligations
As regards the EU mandatory disclosure rules introduced by Council Directive 2018/822/EU, transposed into Maltese legislation by Legal Notice 342 of 2019, the EC is proposing a three-month reporting deferment as follows:
The reporting of cross-border arrangements taking place after 1 July 2020 which must be reported within 30 days;
The reporting of cross-border arrangements that became reportable from 25 June 2018 to 30 June 2020 (referred to as the “historical” arrangements) which are currently reportable by the 31 August 2020;
The first exchange of information on reportable cross-border arrangements which is due by 31st October 2020.
3. VAT E-commerce package
The EC is proposing the postponement of the entry into force of the VAT e-commerce package by six months. These rules should enter into force by 1 July 2021 instead of the current proposed entry date of the 1 January 2021, giving the Member States and businesses more time to prepare for the new VAT e-commerce rules.