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Week Ahead (12 April)


W/C Monday, 12 April - Ireland eases restrictions on movement as new data release to show economic impact of pandemic

Restrictions aimed at containing the Covid-19 in Ireland will begin to lift from today. The easing of the Irish lockdown, rated by the University of Oxford's Blavatnik School of Governance as the most strict in Europe, comes as some member states are re-introducing lockdowns to cope with a rise in infection levels. The governing coalition in Germany has drafted legislation to allow the federal government to assume control of Covid-19 mitigation measures and is advocating for a short nationwide lockdown, while France, Belgium and Poland have all introduced new restrictions in recent weeks.

This week will also see the release of data from Ireland's Central Statistics Office which will show the economic impact of the pandemic. Provisional results from the Government Finance Statistics Annual will show preliminary results from 2020.

Monday, 12 April - EU Commission public consultation on digital tax closes

The deadline for submission to the European Commission's public consultation on digital taxation expires today. The Commission issued a questionnaire in January, seeking the views of stakeholders on the main problems related to taxing the digital economy for both member states and businesses, as well as suggestions for possible solutions to these problems. The consultation is being undertaken as part of the Commission's work towards introducing a digital levy as part of new own resources measures required to generate revenue to pay back the €750 billion recovery fund.

While talks on the two-pillar approach at the OECD are ongoing, the US President Joe Biden last week proposed a new taxation regime which would target the world's largest companies, going beyond the tech sector to include non-digital companies such as Volkswagen if adopted. He has suggested that all international companies with annual global revenues of around $20 billion pay a form of corporate tax wherever they sell their goods or services, which would capture revenue from around 100 companies globally.

It remains to be seen how the US proposals on taxing the world's largest companies is received by the rest of the OECD. Indeed, Republicans in the House Ways and Means committee have already expressed their concern about Biden's proposals and have requested a briefing on the matter from the Treasury Department.

Wednesday, 14 April - ECON meeting to hear from Fabio Panetta on Digital Euro

This Wednesday the European Parliament's Committee on Economic and Monetary Affairs, ECON, will hold an exchange of views with ECB board member, Fabio Panetta, on the Central Bank's public consultation on the digital euro. The consultation ended on 12 January this year and garnered over 8,000 responses. While the ECB has said that it will decide on proceeding with the development of a digital euro by the summer, Panetta, alongside the ECB President, Christine Lagarde, is known to be in favour of the digital currency.

In addition to its engagement with Panetta, ECON will also consider a draft report on Markets in Crypto-assets which was released in February. The rapporteur, Stefan Berger MEP, has proposed an amendment to the European Commission's proposal for a regulation on the crypto-assets market which would see the ECB given power to decide on the entry criteria to the EU payments markets for stablecoins.

Friday, 16 April - Deadline for submission to public consultation on Ireland's corporation tax rules

The Irish government's public consultation on a proposed amendment to the country's corporation tax rules will end on Friday. The consultation is seeking the views of stakeholders and concerns the application of the Authorised OECD Approach (AOA) to the attribution of profits to branches of non-resident companies. Ireland's corporation tax roadmap was updated in January to reflect changes brought about by the modernisation of transfer pricing rules in the Finance Act 2019. The document announcing the consultation said that the next step in the process of modernising the corporation tax regime is "to extend transfer pricing rules to the taxation of branches in Ireland in line with the 'Authorised OECD Approach'", and notes that the government intends to bring forward legislation to this effect in the Finance Bill 2021.

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