COUNCIL OF THE EUROPEAN UNION,update

 

Meetings Wednesday, 11 December 2024

● Council of the EU   11/12/2024 02:17 | Meetings | Main results - Agriculture and Fisheries Council, 9-10 December 2024   During the second day of the meeting, the Council reached a political agreement on fishing opportunities in the Atlantic, the North Sea, the Mediterranean and the Black Seas for 2025. The Council also discussed the progress made during the Hungarian presidency on several legislative files, i.e. the proposals on plant reproductive material, on forest reproductive material and on the protection of animals during transport.

Council of the EU

11/12/2024 02:11 | Press release | Fishing opportunities for 2025 in EU and non-EU waters: Council secures agreement   Fisheries ministers have reached a political agreement on fishing opportunities in the Atlantic, the North Sea, the Mediterranean and the Black Seas for 2025. The deal, reached today by consensus following two days of negotiations, sets out fish catch limits, also known as ‘total allowable catches’ (TACs), and fishing effort limits for the most important commercial fish stocks. The fishing effort refers to the size and engine power of a vessel combined with the number of days spent fishing. The limits agreed are in line with the goal of ensuring the long-term sustainability of fish stocks and the protection of marine ecosystems, while at the same time limiting the impact on communities that depend on fishing. “This year's exercise of setting fishing opportunities was particularly challenging but we managed to secure a balanced agreement. It will allow us to maintain fish stocks at sustainable levels and protect the marine environment, while also considering the viability of the sector. Setting the fishing effort limits in the Western Mediterranean was particularly demanding, but we managed to find a constructive compromise.” — István Nagy, Hungarian Minister for Agriculture The political agreement in detail The stocks covered by the two proposals are those that the EU manages either on its own, jointly with neighbouring non-EU countries, or via agreements reached in regional fisheries management organisations (RFMOs). Following the UK's withdrawal from the EU, fish stocks jointly managed by the EU and the UK are considered shared resources under international law. In line with the EU-UK Trade and Cooperation Agreement, both parties hold annual talks to agree on catch limits for shared stocks. These talks were successfully concluded and the outcome of the EU-UK deal was adopted via written procedure, prior to the Agriculture and Fisheries Council. Today's political agreement integrates the outcome of the EU-UK deal into the main regulation for the Atlantic and North Sea. Bilateral consultations with Norway and trilateral consultations on shared stocks between the EU, the UK and Norway were also successfully concluded ahead of the Council meeting. The figures for those stocks also form part of the overall political agreement reached. Atlantic and the North Sea For the Atlantic and the North Sea, the agreement covers 21 TACs managed autonomously by the EU. The number of TACs negotiated this year is lower since the Council agreed on a number of multiannual TACs in December 2023, to increase predictability and stability for the industry. Following positive scientific advice and the improved state of the stocks, ministers agreed to increase the catch limits for the following stocks: megrims (23%) and anglerfish (17%) in Atlantic Iberian waters common sole in the Bay of Biscay (1%) Norway lobster in the southern Bay of Biscay and Cantabrian Sea (134%) To safeguard stocks, in line with scientific advice, while looking for a balance with socioeconomic considerations, ministers agreed to reduce catch limits for: cod in the Kattegat by 17%; this applies for 2025 and 2026 and is only allowed for by-catches red seabream in Iberian waters by 62%; this is also a multiannual TAC for 2025 and 2026 Norway lobster in the Bay of Biscay 39% common sole in area 3a by 36% For hake in Atlantic Iberian waters and plaice in the Kattegat, the Council agreed to maintain the same catch limits as for 2024.       Given the continued critical state of European eel, the Council decided to continue the six-month closure period for any commercial eel fishing activities, with certain exemptions already agreed for 2023 and 2024, and to keep prohibiting recreational fisheries. Mediterranean and Black Seas As far as the western Mediterranean is concerned, ministers agreed to reduce fishing efforts for trawlers by 66% in Spanish and French waters and by 38% in French and Italian waters to protect demersal stocks, while also considering the socioeconomic impact on the fleets. This reduction is in line with the objectives of the Western Mediterranean Multi-Annual Plan (MAP) for demersal stocks, which will enter its permanent phase on 1 January 2025, after a five-year transitional period. During the permanent phase of the Western Mediterranean MAP, maximum sustainable yield (MSY) ranges will apply. Fishing at MSY levels means catching the maximum proportion of a fish stock that can safely be removed from the stock while at the same time, maintaining its capacity to produce maximum sustainable returns in the long term. In addition, ministers agreed to continue the use of the compensation mechanism that was established for the first time for 2022, allocating additional days to trawlers that opt for more selective gear or that are covered by a national conservation measure, as an incentive to increase the protection of the stock. Combined, the measures agreed by the Council will help contribute to reducing fishing mortality, while also minimising the socioeconomic impact on the sector. Compared to 2024, the Council additionally agreed to reduce the maximum catch limits for blue and red shrimp in Spanish and French waters by 10% and by 6% in Italian and French waters. For giant red shrimp, it agreed to reduce the catch limits by 6% in comparison to 2024 in Italian and French waters. In the Black Sea, the Council agreed to increase the TAC by 3.85% compared to 2024 in the case of turbot, which includes a carry-over of the unused EU turbot quota from 2023. It also agreed to maintain the closure period for turbot fishing from 15 April to 15 June. For sprat, there has been a rollover compared to last year. Next steps Following legal and linguistic checks, the Council will  adopt the regulations at an upcoming meeting. They will then be published in the Official Journal and will apply as of 1 January 2025. Background The setting of TACs and quotas is an annual exercise undertaken by the Agriculture and Fisheries Council in December. Ministers seek a political agreement on catch limits and fishing effort for commercial fish stocks for the following years, along with member state quotas for each species. The political agreement is based on proposals drawn up by the Commission and takes into account the best available scientific advice from the International Council for the Exploration of the Sea (ICES) and the Scientific, Technical and Economic Committee for Fisheries (STECF). It also respects the aims of the common fisheries policy (CFP), namely ensuring that EU fisheries are ecologically, economically and socially sustainable. Furthermore, it takes into account the EU's multiannual plans for various sea basins, and follows decisions taken within regional fisheries management organisations. Total allowable catches for 2025 (table) Council approves EU-UK fishing deal for 2025 (press release) Fishing opportunities in the Atlantic and the North Sea (Commission proposal) Fishing opportunities in the Mediterranean and the Black Seas (Commission proposal) Management of the EU's fish stocks (background information) ● Council of the EU   10/12/2024 16:22 | Meetings | Main results - Economic and Financial Affairs Council, 10 December 2024   Ministers were informed of the progress of work on the customs reform. They held a policy debate on the revision of the energy taxation directive. The Commission presented draft Council recommendations in the context of the implementation of the economic governance review and of the excessive deficit procedure. Ministers took stock of the implementation of the Recovery and Resilience Facility (RRF) and took note of the state of play of the economic and financial impact of Russia’s aggression against Ukraine. The Council approved the bi-annual ECOFIN report to the European Council on tax issues. ● Council of the EU   10/12/2024 13:25 | Press release | Recovery and resilience fund: Council greenlights the amended plans of Sweden, Slovenia, Denmark and Belgium   The Council today approved the Commission’s positive assessment of the amended recovery and resilience plans submitted by Sweden, Slovenia, Denmark and Belgium. According to the analysis of the Commission, the targeted modifications put forward by the member states do not affect the relevance, effectiveness, efficiency and coherence of their recovery and resilience plans. Sweden On 19 September 2024, Sweden submitted targeted amendments to its recovery and resilience plan. The plan is worth € 3.5 billion in grants.  Slovenia On 18 October 2024, Slovenia submitted targeted amendments to its recovery and resilience plan. The plan is worth € 2.7 billion in grants and loans.  Denmark On 22 October 2024, Denmark submitted targeted amendments to its recovery and resilience plan. The plan is worth € 1.8 billion in grants. Belgium On 25 October 2024, Belgium submitted targeted amendments to its recovery and resilience plan. The plan is worth € 5.3 billion in grants and loans. Background The RRF is the EU’s large-scale financial support programme in response to the challenges the COVID-19 pandemic has posed to the European economy. It is the centrepiece of NextGenerationEU, a temporary recovery instrument that allows the Commission to raise funds to help repair the immediate economic and social damage caused by the pandemic. To benefit from the facility, member states must submit recovery and resilience plans (RRPs) to the Commission, setting out the reforms and investments they intend to implement by the end of 2026. So far, €648 billion have been committed to this end. To date, all RRPs have been approved, 71 payment requests have been received and €269 billion have been disbursed. Council implementing decision approving the assessment of the recovery and resilience plan for Sweden Council implementing decision approving the assessment of the recovery and resilience plan for Slovenia Council implementing decision approving the assessment of the recovery and resilience plan for Denmark Council implementing decision approving the assessment of the recovery and resilience plan for Belgium A recovery plan for Europe (background information)  General Secretariat of the Council   Think Tank reports on Russia’s war of aggression against Ukraine   The importance of military mobility in times of crisis for the EU and NATO, the path of Ukraine from war to peace and recovery, how to finance the war after the American elections, and the costs of not supporting Ukraine are some of the topics dealt with in the present update.   ● Council of the EU   10/12/2024 10:20 | Press release | Taxation: Council introduces electronic VAT exemption certificate   The Council today reached a political agreement on a new directive paving the way for the introduction of an electronic tax certificate for VAT exemptions. “As part of the EU’s efforts to update VAT systems, I’m glad that after the VIDA package last month, we are taking another modernising step with this agreement on the electronic VAT exemption certificate, that will put an end to paper certificates to be signed by hand.” — Mihály Varga, Hungarian minister for finance The directive will provide for an electronic certificate to replace the existing paper certificate that is used when goods are to be exempt from VAT, for example because they are imported for embassies, international organisations or armed forces. The exact electronic format, including the necessary IT specifications, will be discussed in expert groups and determined in Commission implementing acts. In a transitional period member states will be able to use both electronic and paper versions. Member states brought a number of amendments to the Commission’s initial proposal. In particular they limited the scope of the mandatory use of the electronic VAT exemption certificate to situations where two member states are involved and the exemption is not granted by way of a refund. The Council also added to the Directive a number of key elements of the future electronic certificate that the Commission will take into account when designing the format, in the text of the directive. Furthermore, the Council shortened the transition period, originally planned to last 4 years (2026-2030), to just 1 year (2031-2032). The delayed starting date should help tax authorities spread in time the necessary IT developments, which will coincide with the significant investments needed to implement the VIDA package. Next steps The agreements will now go through technical and linguistic check before being presented to the Council for formal adoption. The texts will then be published in the EU’s Official Journal and enter into force. Background On 8 July 2024, the Commission published two proposals with the aim of replacing the current paper VAT exemption certificate with an electronic VAT exemption certificate: a proposal for a Council Directive amending Directive 2006/112/EC as regards the electronic value added tax exemption certificate (the Council Directive); - a proposal for a Council Implementing Regulation amending Implementing Regulation (EU) No 282/2011 as regards the electronic value added tax exemption certificate (the Council Implementing Regulation). The proposal to amend the VAT Directive creates the legal conditions for the development of the electronic certificate by the Commission through implementing measures, while the proposal to amend the Implementing Regulation provides for the alternative use of both paper and electronic certificates during a transition phase. The Council today agreed on both these proposals. The European Parliament was consulted on the proposal for a directive and delivered its opinion on 13 November 2024. Taxation: Council agrees on VAT in the digital age package (press release, 5 November 2024) Digital taxation (background information) Taxation (background information) ● Council of the EU   10/12/2024 10:12 | Press release | Taxation: Council adopts new rules for withholding tax procedures (FASTER)   The Council today adopted new rules setting up safer and faster procedures to obtain double taxation relief that will encourage cross-border investment and help fight tax fraud. The FASTER directive aims to make withholding tax procedures in the EU safer and more efficient for cross-border investors, national tax authorities and financial intermediaries, such as banks or investment platforms. “The FASTER directive will align our withholding tax relief procedures to make sure investors don’t pay double taxes on the returns from their cross-border investments in shares and bonds. This is an important step towards deepening the capital markets union, as more efficient withholding tax procedures will encourage investment on the EU’s financial markets. They will also reduce administrative burden and make it easier to spot tax fraud.” — Mihály Varga, Hungarian minister for finance Double taxation Currently, where cross-border investments are concerned, many member states levy taxes on dividends (from equities and shares) and interests (on bonds) paid to investors who live abroad. At the same time, those investors have to pay income tax in their country of residence on the same income. Although treaties between member states aim to solve the issue of double taxation, in reality the procedures to claim withholding tax relief vary considerably from one member states to another, which results in relief or refund procedures being lengthy, costly and cumbersome. These procedures can also be vulnerable to large-scale tax fraud. The FASTER directive will make tax relief procedures faster, simpler and, at the same time, safer. Common tax residence certificate The directive will introduce a common EU digital tax residence certificate (eTRC) that tax paying investors would be able to use in order to benefit from the fast-track procedures to obtain relief from withholding taxes. Member states will provide an automated process to issue digital tax residence certificates (eTRC) to a natural person or entity deemed resident in their jurisdiction for tax purposes. Fast-track procedures The directive will allow member states to have two fast-track procedures complementing the existing standard refund procedure for withholding taxes. This will make relief and refund processes faster and more closely harmonised across the EU. Member states will have to use one or both of the following systems: a “relief-at-source” procedure where the relevant tax rate is applied at the time of payment of dividends or interest a “quick refund” system where the reimbursement of overpaid withholding tax is granted within a set deadline EU countries must apply the fast-track procedures if they provide relief from excess withholding tax on dividends paid for publicly traded shares. Member states will have an option to maintain their current procedures, and not apply Chapter III of the directive, if: they provide a comprehensive relief-at-source system applicable to the excess withholding tax on dividends paid for publicly traded shares issued by a resident in their jurisdiction and their market capitalisation ratio is below a threshold of 1.5% (as reported by ESMA). Nevertheless, if this ratio is exceeded for four consecutive years, all rules foreseen by the directive will become irrevocably applicable. In such cases member states will have five years to transpose the rules of the directive into national law. These features take into account the size of the financial markets of member states, while also recognising that some member states maintain national systems that are adequate for their current market conditions. they provide relief from excess withholding tax on interest paid for publicly traded bonds. The Council introduced in the text additional circumstances in which member states may exclude, completely or partially, requests for withholding tax relief from the fast-track procedures, in order to perform further checks, with a view to preventing fraud. The Council added provisions to the text regarding indirect investments for cases where the investor does not invest directly insecurities but through a collective investment undertaking. These provisions ensure that legitimate investors such ascertain collective investment undertakings or their investors have access to the fast-track procedures. Under the new rules, certified financial intermediaries requesting relief on behalf of a registered owner will need to carry out due diligence regarding the registered owner’s eligibility to benefit from tax relief. Standardised reporting for financial intermediaries The directive will set a standardised reporting obligation for financial intermediaries (like banks or investment platforms). This will make it easier for national tax authorities to detect potential tax fraud or abuse. Member states will establish national registers where large (and optionally smaller) financial intermediaries will have to register to be certified. In order to simplify this registration procedure, the Council agreed to create a European Certified Financial Intermediary Portal. This portal will act as a central dedicated website where the national registers will be accessible. Member states will retain the necessary discretion when it comes to registering and removing certified financial intermediaries in specific cases and to adopting measures that concern them. Once registered the financial intermediaries will need to report the necessary information to the relevant tax authorities so that the transaction can be traced. Member states will have the option of requesting more extensive reporting in relation to transactions with a view to detecting possible cases of tax abuse or fraud. The Council added the possibility of indirect reporting in addition to direct reporting. Where the reporting is direct, a certified financial intermediary is to report directly to the competent authority of the source member state. Where the reporting is indirect, the information is to be provided by each of the certified financial intermediaries along the securities payment chain. Penalties will be imposed by member states where obligations stemming from this directive are not complied with. Background and next steps The European Commission submitted a proposal for the FASTER directive on 19 June 2023. This proposal is subject to a special legislative procedure, where the Council acts as a sole legislator. Within the Council unanimity is required. The European Parliament was consulted and it delivered its opinion on 28 February 2024 and, once re-consulted by the Council, on 14 November 2024. The text will now be published in the EU’s Official Journal and enter into force. Member states will have to transpose the directive into national legislation by 31 December 2028, and the national rules will have to apply from 1 January 2030. The European Parliament was consulted and it delivered its opinion on 28 February 2024. After being re-consulted by the Council, it delivered a new opinion on 14 November 2024. Council Directive on Faster and Safer Relief of Excess Withholding Taxes Taxation (background information)