HOT: Simpler tax rules for cross-border SMEs in the EU

Compliance with business taxation rules can be complex. If SMEs wish to operate cross-border, they become taxable in more than one Member State as soon as their activity abroad creates a permanent establishment, which requires compliance with different tax systems and rules.

Compliance with those obligations comes with fixed costs, creating a barrier that can prevent SMEs from developing into other markets, investing back into their business or hiring new staff. This is especially the case for new companies and start-ups.

Under the new Head Office Taxation (HOT) proposal, cross-border SMEs would be able to choose to interact with only one tax administration in one EU Member State – that of the Head Office – instead of having to comply with multiple tax systems.

The Commission's proposal will increase tax certainty and reduce compliance costs, which will help to foster investment and cross-border expansion in the EU.

The webinar is addressed to SME's. It will explain the proposal to the interested audience and will also address questions from the audience.

TIMESTAMPS

0:28 Introduction
1:45 HOT promotion video
5:38 Speaker’s introduction
6:11 Question 1 - I am a small business operating in the Netherlands but would like to expand into Belgium, can you elaborate on what the HOT proposal does and how it will help me?
9:55 Question 2 - I am an SME and I have set up a subsidiary in another Member State, am I excluded from applying to use the HOT system?
11:15 Question 3 - You say that a SME can only apply to exercise the HOT rules once it is resident for two years in a Member State, this rule could exclude startups from the simplification tool.
14:10 Question 4 - But if I am an SME that does not expand, I may have to compete with SMEs from other member states which apply different rules and may pay less tax than I do.
16:23 Question 5 - Can I deal with all my tax obligations under HOT? Income tax, employment tax, VAT, etc.?
18:10 Question 6 - How many SMEs will be eligible for HOT and how will this proposal benefit them?
19:43 Question 7 - Will SMEs still interact with their Head Office’s tax authority in case of tax disputes in other Member states? What about judicial proceedings?
21:09 Question 8 - Is this [HOT] also applicable for large companies? Can they benefit somehow?
23:07 Question 9 - Can non-EU companies apply for the HOT scheme?
24:04 Question 10 - You state that the HOT rules are not law yet, what is the process in making them law, and can business play a part in that process?
27:16 Outro