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European Commission London Office weekly news round-up
Main news from Brussels this week
The Commission finds Luxembourg gave illegal tax benefits to Amazon worth around €250 million
On 4 October, the European Commission concluded that Luxembourg granted undue tax benefits to Amazon of around €250 million. This is illegal under EU state aid rules because it allowed Amazon to pay substantially less tax than other businesses. Luxembourg must now recover the illegal aid. This follows an in-depth investigation launched in October 2014.
The Commission refers Ireland to the European Court of Justice for failure to recover illegal tax benefits from Apple worth up to €13 billion
The European Commission has decided to refer Ireland to the European Court of Justice for failing to recover from Apple illegal state aid worth up to €13 billion, as required by the Commission's decision of 30 August 2016. This decision concluded that Ireland's tax benefits to Apple were illegal under EU State aid rules, because they allowed Apple to pay substantially less tax than other businesses. The deadline for Ireland to implement the Commission's decision on Apple's tax treatment was 3 January 2017, four months after the official notification of the Commission decision.
Reform of the EU VAT system
On 4 October, the European Commission proposed the biggest reform of EU VAT rules in a quarter of a century. The reboot would improve and modernise the system for governments and businesses alike. Over €150 billion of VAT is lost annually, depriving member states of revenue that could be used for schools, roads and healthcare. Of this, around €50 billion - or €100 per EU citizen each year - is estimated to be lost to cross-border VAT fraud. This is money that could be used to finance criminal activities, including terrorism. It is estimated that under the proposed reform the amount of VAT lost due to this type of fraud will be reduced by 80%. The proposals would also make the system more robust and simpler to use for companies. Simplifying and modernising VAT should reduce compliance costs for cross-border businesses by an estimated €1 billion.
Boosting apprenticeships in Europe
On 5 October, the European Commission proposed a European framework for high quality and effective apprenticeships. This initiative will help increase the employability and personal development of apprentices and contribute towards a highly skilled and qualified workforce responsive to the needs of the labour market.
All this week's key European Commission announcements can be found here
EU and the UK
Brexit negotiations: state of play
On 3 October, European Commission President Jean-Claude Juncker and Chief Negotiator Michel Barnier briefed the European Parliament in Strasbourg on the state of play of Brexit negotiations with the United Kingdom. President Juncker referred to Prime Minister May's speech in Florence as conciliatory. He stressed that work still remains to be done and said: "I can't say that we are ready to enter the second phase of negotiations." Michel Barnier reiterated that the three main topics for the first part of the discussions on the UK's orderly withdrawal – citizens' rights, the financial settlement, and Ireland – go together.
A fifth round of negotiations will take place in Brussels next week.
MEPs passed a resolution against moving on to the second phase of Brexit talks. Heads of State and Government will make a decision on this at the European Council summit on 19-20 October.
Relocation of the European Banking Authority and the European Medicines Agency
The European Commission published its assessment of the 27 offers received by member states to host the European Banking Authority (EBA) and the European Medicines Agency (EMA), which are currently located in the United Kingdom. The decision is for the governments of the 27 member states to take. The Council will have a political discussion at the General Affairs Council (Article 50 format) in October 2017. A final decision will be taken at the General Affairs Council (Article 50 format) in November 2017.
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EU in the media this week
Every week, we pick out one of the week's most interesting stories or comment pieces….which does not mean we agree with everything it says:
Anthony Hilton: Brexit misery proves fallacy of free markets, London Evening Standard
EU fact of the week
Our Ocean conference: EU leading action for cleaner and safer seas
With over 10 million tonnes of litter ending up in the sea each year, by 2050 our oceans could contain more plastic than fish.
This is one of the reasons why the EU has announced 36 initiatives to foster healthier, cleaner and safer seas at an international conference which took place on 5 and 6 October in Malta. The European Commission announced over €550 million of EU-funded initiatives to tackle global oceans challenges which add to commitments by 112 countries around the world to a total exceeding €6 billion. The resources will be invested to strengthen the fight against marine pollution and enlarge protected areas, reinforce security of the oceans, foster blue economy initiatives and sustainable fisheries and intensify the EU efforts against climate change. The full list of commitment can be found here. The conference was co-hosted by the EU High Representative/Vice-President Federica Mogherini and Karmenu Vella, Commissioner for Maritime Affairs and Fisheries. HRH The Prince of Wales addressed the conference on the opening morning. The next such forum will be in Indonesia in 2018.
Tweet of the week
— Věra Jourová (@VeraJourova) October 3, 2017
Quote of the week
"More people than ever before in Europe have a job and unemployment has reached a nine-year low. And we see 2.2 million more employees with permanent contracts compared to last year. We need to continue on this path and improve the economic and social conditions for all," Marianne Thyssen, EU Commissioner for Employment, Social Affairs, Skills and Labour Mobility.
Picture of the week