The EC announced to today (22nd Oct) that it has decided to “set up a group of experts in the field of taxation of the digital economy …[to] help to develop a comprehensive Union position on tax issues in the digital economy by analysing the issues at stake and providing the Commission with a range of solutions to address these issues”.
The EU has published a consultation document (external PDF) on the proposed UK video games relief, inviting comments – it’s all pretty much as expected, but interesting to note that at para 34, the document states that “… as in the Commission’s preliminary assessment of the French video games tax credit [in 2006], the Commission doubts that the proposed UK video games cultural test would ensure that the aid would support only games with cultural content without leading to undue distortion of competition in this ver competitive market”. The French credit was ultimately approved by the EU, which adds weight to the view that the UK credit may also ultimately be approved.
Kronospan Mielec sp zoo v Dyrektor Izby Skarbowej w Rzeszowie (Case C-222/09): the ECJ confirmed that where R&D services carried out by engineers are supplied ‘on a contract basis for the benefit of a recipient established in another Member State’, they were ‘services of engineers’ and so the place of supply is the country in which their work is carried out, not the country from which they are supplied.
Following the report on the functioning of the Interest & Royalties Directive over a year ago, the EU has now launched a consultation on the Directive, looking to clarify existing legislation on taxation of cross-border royalties (and interest) between associated companies and extending benefits of that legislation to a wider range of companies.
HMRC’s Notice 34 on intellectual property rights enforcement at the UK external border has been updated (although not yet on the HMRC website) to take into account changes in EC regulations.
Prolab Nutrition Europe (TC00269): the customs value of goods for import duties includes any royalties and licence fees paid as a condition of sale (Article 29(1)/Article 32(1) of Council Regulation 2913/92 (the Community Customs Code). The court held that payments for exclusive distribution rights are not royalties or licence fees for the purposes of determining customs value.
The European Commission has prodded Lithuania again (with an additional reasoned opinion) about its rules under which royalty payments to non-resident companies are taxed more heavily than those to resident companies.
The European Commission has issued a report on the functioning of the Interest and Royalties Directive. The report says that the overall implementation of the Directive has been satisfactory. However, suggestions for more uniform interpretation and legal certainty are proposed.
The EU has apparently sent member states a formal proposal to reclassify some phones as “multi-functional devices,” raising import duties on those phones.