As a general note, whilst this international alignment is of crucial importance, EPIF members note that the DAC8 is
only one of a collection of European actions that have been taken to improve protection, stability and transparency
in crypto-asset markets. The soon to be published Markets in Crypto-Assets (MiCA) Regulation creates an already
strong framework for crypto-assets and establishes an important understanding of definitions in the relevant market.
Likewise, there are also ongoing negotiations on the new anti-money laundering rules that are likely to require
enhanced due diligence and KYC measures to these assets. Against this backdrop, EPIF reiterates that it is
important to ensure consistency between all these files.

With regards to the provisions in the proposal, EPIF members consider that the European Commission has reached
a reasonable balance between minimizing the risk of tax avoidance and what is technically feasible for the entities
responsible for the reporting activities. Notwithstanding, certain elements still raise concerns and require additional
clarifications, notably in terms of the in-scope assets and the reporting obligations. These are explored in more
detail below.

The post EPIF Response to the DAC Proposal appeared first on Payment Institutions.

We however maintain that the continued pursuit of a multitude of unilateral corporate tax initiatives will lead to a high degree of unnecessary complexity, uncertainty and inevitable multilayer taxation. Therefore, EPIF strongly recommends for the European Commission to remain as close as possible to multilateral tax agreements of the OECD instead of pursuing unilateral European and/or Member States’ initiatives.

Our full position can be found below.

The post EPIF response to BEFIT appeared first on Payment Institutions.

EPIF points out that the proposed rules lead to inequalities that result from the exclusion being determined on an entity-level basis and thus applies to the financial services activities of such an entity as it competes alongside companies that do not benefit from the exclusion.

EPIF thus supports the creation of a wider class of RFI Service Providers through the extension of the scope to cover regulated PIs and EMIs. EPIF also recommends a review of the impact of Pillar One within two years of implementation.

The post EPIF response to the OECD RFI exclusion under Pillar 1 – Amount A appeared first on Payment Institutions.

E-money, as defined by EU legislation, is by design a means of payment for services and goods that contributes to financial inclusion rather than a deposit in the “ordinary course of a banking business”– both as regards to the overall value stored on average on an e-money instrument, as well as the timeframe over which this value is stored on an e-money instrument. Classical use cases are low value payments for digital goods and services or payments on public transport networks whereas industry evidence also shows that as customers depend more on e-commerce, they have grown to rely on e-money also for purchases of expensive items e.g. luxury holidays, cars, art, electronic goods.

EPIF supports the objective to fighting tax fraud and tax evasion by capturing e-money accounts that are being used to hold large balances over a sustained period of time. Indeed, some e-money products provide a functionality resembling that of a bank account.

However, EPIF strongly maintains that a clear demarcation is needed between those use cases where the holder of e-money clearly intends to use e-money instruments as a means of storing large amounts of capital and/or over a longer timeframe, from those use cases where the holder of e-money clearly intends to use e-money instruments to make purchases. To ensure that the reporting objective is met, EPIF proposes establishing clear reporting thresholds.

EPIF also proposes to distinguish payment products where the payment service provider acts in a passthrough capacity, e.g. products that are used for money remittance, enable the acquiring of transactions for merchants, or are used for making payments to suppliers or to employees. In particular, EPIF would argue that an entity undertaking money remittance, and no other activities, does not present a risk of being used for tax avoidance or evasion and thus should be excluded from the scope of DAC. To the extent that a money transfer entity provides stored value products, it could potentially be in scope of DAC and thus be required to perform due diligence on accounts above the threshold proposed.

At last, EPIF strongly agrees with the European Commission Inception Impact Assessment that only the data necessary to perform the risk analysis and facilitate tax control of e-money should be collected. EPIF also calls for a single home country reporting mechanism regarding the data collection by national authorities.

The post EPIF response to European Commission public consultation on DAC8 to include e-money appeared first on Payment Institutions.

EPIF members consider the following overarching design principles for a future modernised VAT framework:

• Provide legal certainty to taxpayers engaged in the provision of financial services;
• Ensure consistency and channel neutrality in the VAT treatment of financial services across the EU [for suppliers and merchants];
• Ensure level playing field across all providers of financial services in the EU, irrespective of their business model or location;
• Enable business structuring decisions to be made, without regard to VAT costs;
• Remove any existing distortion of competition;
• Have minimal impact on exchequer receipts.

The post EPIF response to European Commission public consultation on the review of VAT rules for financial & insurance services appeared first on Payment Institutions.

Please find below the link to our response and cover letter that we submitted to the Commission.

The post EPIF response to European Commission public consultation on a fair & competitive digital economy – Digital Levy appeared first on Payment Institutions.

The post EPIF views on the revision of DAC to include e-money and crypto-assets appeared first on Payment Institutions.

The post EPIF written comments on OECD consultation on Pillar Two blueprint appeared first on Payment Institutions.

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