EU Insight 11 June, 2021

Brussels, 11 June 2021

DESPITE GLOBAL TAX AGREEMENT, EU DIGITAL LEVY EXPECTED TO GO AHEAD

After years of discussions on how to tackle tax challenges arising from the digital economy, the Finance Ministers of the G7 found a deal on a global tax reform. The two-pillar global solution will require global firms with at least a 10% profit margin to pay tax in the countries where they generate revenue, rather than where they have physical presence, and foresees a 15% global minimum corporate tax. The agreement may pave the way for a global solution at the OECD-level. Meanwhile, the debate on the matter at EU level continues, with Commission officials saying that the EU digital levy will go ahead despite the possibility of a global agreement.

COMMISSION PUBLISHES FINDINGS OF CONSUMER IOT SECTOR INQUIRY

The European Commission published the preliminary results of its competition sector inquiry into markets for consumer Internet of Things (IoT) related products and services. The Preliminary Report confirms the rapid growth of these markets, but also identifies potential concerns put forward by the respondents to the sector inquiry, including on exclusivity and tying practices in relation to voice assistants and on providers’ extensive access to data. The Preliminary Report will now be subject to a public consultation for a period of twelve weeks. The Commission aims to publish the Final Report in the first half of 2022.

COUNCIL ENDORSES NEW EU STRATEGY ON ADAPTATION TO CLIMATE CHANGE

The EU Member States endorsed a new strategy outlining a long-term vision for the EU to become a climate-resilient society by 2050. This strategy builds on the 2013 adaptation strategy and aims to make adaptation smarter, swifter and more systemic, and to step up international action on adaptation to climate change. The conclusions reflect Council’s support for improving access to and exchange of knowledge on climate impacts and adaptation, for the role of nature-based solutions in building climate-resilience and for integrating adaptation into macro-fiscal policies. The Council conclusions give political guidance to the Commission as regards the implementation of the strategy.

COUNCIL ADOPTS THE JUST TRANSITION FUND TO CONTRIBUTE TO CLIMATE NEUTRALITY

The Member States also adopted a Regulation establishing a €17.5 billion fund which will contribute towards making the green transition fair and inclusive. The Just Transition Fund (JTF) will finance projects that will alleviate the socio-economic costs for communities across the EU that are heavily dependent on fossil fuels or greenhouse gas-intensive industries and need to diversify the local economy. This is one of the measures the EU is taking to achieve its goal of a 55% reduction in greenhouse gas emissions by 2030 and climate neutrality by 2050. The JTF Regulation will enter into force on the day after its publication in the Official Journal of the EU.

PARLIAMENT ASKS TO DROP VACCINE PATENT PROTECTIONS AND GREENLIGHTS COVID CERTIFICATE

The European Parliament passed a resolution calling for a temporary waiver of intellectual property rights in relation to COVID-19 vaccines, treatments, and equipment. The resolution which passed with 355 votes to 263, and 71 abstentions, is not binding but sends a political message and pits the Parliament against the Commission, which has so far opposed the patent waiver for vaccines. The Parliament also gave the final green light – this time almost unanimously – to the EU Digital COVID Certificate Regulation. The text, which will now have to be approved by the Council before entering into force from 1 July, aims to ease travel restrictions and reduce testing’s costs.

COMING UP NEXT WEEK

• 11-13 June: G7 summit. On the agenda: Recovery, resilience, foreign policy, health, open societies & economies, climate & nature
• 14 June: EU-Canada summit. On the agenda: COVID-19 response and recovery; fighting climate change and protecting the environment; trade, technology, and innovation; and promoting democratic values, peace and security.
• 14 June: Informal video conference of development ministers. On the agenda: EU cooperation with middle-income countries – development in transition.
• 14-15 June: Employment, Social Policy, Health and Consumer Affairs Council. On the agenda: European Child Guarantee, minimum wages, European Medical Agency, COVID-19
• 14-15 June: Informal meeting of agriculture and fisheries ministers.
• 15 June: EU-US summit. On the agenda: COVID-19, climate, trade and investment, technology, foreign affairs, and common values.
• 17 June: Eurogroup. On the agenda: Banking Union, post-programme surveillance, ERM II.
• 18 June: Economic and Financial Affairs Council. On the agenda: MiCA, Banking Union, VAT, economic recovery, Stability and Growth Pact, European Semester 2021.

Karl Isaksson, Managing Partner Brussels, Kreab

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Kreab • Tel: +32 2 737 6900 • karl.isaksson@kreab.com • www.kreab.com/brussels • Twitter: @KreabEU.