The European Commission has published the key decision of its July infringements package. With respect to taxation, one item of note is a letter of formal notice sent to Belgium regarding the correct transposition of the Anti-Tax Avoidance Directive (ATAD). In addition, the infringement package includes that reasoned opinions have been sent to the Czech Republic, Denmark, and Italy regarding the implementation of the 4th Anti-Money Laundering Directive, and that referrals have been made to the Court of Justice of the European Union regarding the implementation of EU anti-money laundering rules by Austria, Belgium, and the Netherlands.

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Taxation: Commission requests BELGIUM to correctly transpose the Anti-Tax Avoidance Directive (ATAD)

The Commission has today sent a letter of formal notice to Belgium requesting it to correctly transpose EU measures against tax avoidance practices (the Anti-Tax Avoidance Directive Council Directive (EU) 2016/1164 or ATAD).

Its correct transposition should reflect the following three elements: first, Belgium made use of the possibility to exempt from the interest limitation rules in ATAD borrowing costs incurred on loans used to fund long-term public infrastructure projects. However, the definition of these infrastructure projects in Belgian law does not correspond to the definition in ATAD. Second, Belgium excludes from the interest limitation rules certain types of entities, which do not qualify as “financial undertakings” under ATAD. Finally, contrary to ATAD, Belgian law does not eliminate double taxation arising from the application of controlled foreign company (CFC) rules and does not allow a taxpayer to deduct from its tax liability the tax paid by a controlled foreign company in the state of tax residence.

If Belgium does not act within the next three months, the Commission may send a reasoned opinion to the Belgian authorities.

Anti-Money Laundering: Commission calls on CZECHIA, DENMARK and ITALY to fully implement the 4th Anti-Money Laundering Directive

The Commission today sent reasoned opinions to Czechia, Denmark and Italy for failing to fully implement the 4th Anti-Money Laundering Directive (AMLD4) into national law.

Following an assessment of the notified measures by these Member States, the Commission has concluded that several provisions of the AMLD4 have not been fully transposed. The fight against money laundering and terrorist financing is key to ensuring financial stability and security in Europe. In recent times, money laundering scandals have revealed the need for stricter rules at EU level. Legislative gaps occurring in one Member State have an impact on the EU as a whole. That is why EU rules should be implemented and supervised efficiently in order to combat crime and protect our financial system. The Commission published a six-point Action Plan on 7 May to further strengthen the EU's fight against money laundering and terrorist financing.

Without a satisfactory response from Czechia, Denmark and Italy within the next three months, the Commission may decide to refer the cases to the Court of Justice of the European Union.

Anti-Money Laundering: Commission decides to refer AUSTRIA, BELGIUM and the NETHERLANDS to the Court of Justice of the EU for failing to fully implement EU anti-money laundering rules

The European Commission has today referred Austria, Belgium and the Netherlands to the Court of Justice of the European Union, with a request for financial sanctions, for failing to fully implement the 4th Anti-Money Laundering Directive (AMLD4) into their national law.

Following an assessment of the notified measures by these Member States, the Commission has concluded AMLD4 has not been fully transposed into national law. The incomplete transposition concerns fundamental aspects of the anti-money laundering framework, such as betting and gambling legislation (Austria), mechanisms under which the Financial Intelligence Units exchange documents and information (Belgium), and the information to be provided on the beneficial ownership of corporate and other legal entities (Netherlands). For more information, please refer to the full press release.