Fédération des Experts-comptables Européens EU regulatory update Hilde Blomme, FEE Deputy CEO 19 November 2014 EGIAN www.fee.be Connect with European Professional Accountants @FEE_Brussels 1
Content Audit reform challenges and opportunities Public sector Tax Long-term financing SMPs FEE strategic priorities 2015 2
Fédération des Experts-comptables Européens Audit reform www.fee.be Connect with European Professional Accountants @FEE_Brussels 3
Key Implementation Issues Different interpretation Role of the profession Timing of the implementation process MS options in specific subjects: Definition of PIE Mandatory audit firm rotation Provision of non-audit services 4
Definition of Public Interest Entities (PIEs) in Europe Exemptions from the definition EU definition Additionally designated entities 5
Mandatory audit firm rotation Expected: 10y 10y Tender 20years EXCEPT: Italy,, Spain: 9y without option for extension Netherlands: from 8->10y without option for extension Poland, Portugal: 10y, no extension Belgium: min. duration 3->5y to (5+5=10)+(5+5=10)y France: joint audit: 6y (min. dura on set) * 4 24y FEE views: aim for minimal burden and maximum choice and flexibility for businesses 6
Prohibition of non-audit services (NAS) MS options to: Add to the black list, impose stricter rules FEE views: could create regulatory divergence -> white lists in FR and NL (maybe UK) No other country seemsto go for this option (?) Allow tax and valuation services on grounds of materiality FEE views: could increase flexibility & choice for businesses Germany (?) mightgo for thisoption 7
In summary, a few challenges ahead Short term Interpretation issues Transitional regime for audit firm rotation Medium term Increased tendering activity Divergent national legislative frameworks Long term Audit quality & sustainability of profession 3Y European Competition Network reviews 8
but also some opportunities for you MAFR Possibility to tender Prohibition of NAS Provision of NAS to non-audit clients BE PREPARED 9
Briefing Papers The Appointment of Auditor Public Oversight Provision of NAS
Definition of PIEs
Fédération des Experts-comptables Européens Public sector developments www.fee.be Connect with European Professional Accountants @FEE_Brussels 12
FEE facilitates the IPSAS/EPSAS debate Series of roundtables on public sector accounting Core message of European accountancy profession Promote Accrual accounting at all levels of public sector Preference towards international standards Acceptance of EPSAS (if certain conditions are met) 13
Public Sector: FEE s strategic priority Professions role in public sector Policy debate, governance model, standard setting and legislation Advice in implementation, transition plans, training, IT Accounting, reporting and assurance 14
FEE s initiatives on IPSAS and EPSAS EC Consultations EC Conference EC Task Forces EC Plans IPSASB Sustainability of IPSAS EPSAS Governance Towards implementing EPSAS Governance Standards Communication Framework regulation Standards Governance consultation Exposure drafts Joint meeting 15
EPSAS information and views 16
Fédération des Experts-comptables Européens Tax www.fee.be Connect with European Professional Accountants @FEE_Brussels 17
LuxLeaks A Nuclear Bomb for the Profession? International Consortium of Investigative Journalists (ICIJ) Leak on 5 November >300 comfort letters re tax rulings between Lux. tax authorities & MNEs brokered by pwc Political motive <-> Juncker? 18
LuxLeaks The Fallout ICIJ EC Published report Big 4s role in such schemes Likely to increase state aid investigations Luxembourg New culture of financial transparency Trade Unions Only invest in tax-paying MNEs WikiLeaks BEPS LuxLeaks? 19
The scene Double Irish Two Irish holding companies Dutch Filling Additional Dutch holding company Hybrid Mismatch Example Double Deductions Hybrid loans 20
OECD Base Erosion & Profit Shifting (BEPS) Sept 14 Deliverables Tax Challenges of Digital Economy Combatting hybrid mismatches Seven guidance documents Combatting harmful tax practices Preventing tax treaty abuses Transfer pricing and Intangibles Transfer pricing documents and CbCR Developing a multi-lateral instrument 21
OECD Base Erosion & Profit Shifting (BEPS) Sept 14 Deliverables Agreement on most aspects by 44 early adopters Slow progress on patent boxes Rafa Russo: the taste (of structures like the double Irish) won t be as good as it was before Ireland closed the double-irish in their last budget 22
EU Developments Direct Tax Update Parent- Subsidiary Directive Financial Transaction Tax CCCTB Specific anti-abuse rule Still some political will amongst the 10 remaining countries. solution to LuxLeaksschemes? 23
New Savings Directive Agreed by all EU MS To be implemented by Sep 2017 Negotiations with 3 rd Countries in progress Political will to have them signed by the end of 2014 24
EU Developments Indirect Tax Update Standard VAT Return Initiative on definitive regime Electronic services Unlikely to be passed in the Council Alternative for place of supply/taxation New place of supply rules 25
FEE Tax Day 2015 29 April 2015 Ties in with the compendium project Keynote speaker Pascal Saint-Amans (OECD) 26
FEE project: Tax Policy - A matter for society as a whole A critical issue for the profession and society as a whole Aim to publish a compendium of views on the future of tax FEE will prepare the foreword summarising key viewpoints and arguments To be ready for 2015 FEE Tax Day 27
Fédération des Experts-comptables Européens Long-term financing of the EU Economy www.fee.be Connect with European Professional Accountants @FEE_Brussels 28
Long term finance General info Objective: stimulate long-term finance in the EU Mobilizing sources of finance: public/private EC & Sustainable finance Corporate Governance Accounting and Tax Legal matters 29
Long term finance General info Impact Banks and Insurance undertakings Markets regulation Access to public finance SMEs Focus Infrastructure 30
Long term finance - EU position Importance in the Commission Jobs, Growth and Investment Package, January 2015 Impact on SMEs High importance for economy 31
Fédération des Experts-comptables Européens SMPs www.fee.be Connect with European Professional Accountants @FEE_Brussels 32
Connect national SMP issues to EU/international level Integrate SMP perspective in all FEE activities EC Expert Groups EC Executive Agency for SMEs IFAC SMP Committee World Bank Member Bodies SMP Forum 56 representatives from 21 countries - Online communication Corporate Reporting - Bi-yearly meetings Anti-Money Laundering Accounting Tax Auditing Professional Ethics & Competences
Support SMPs helping SMEs SMP Info Packs 34
VAT and Cross-Border Supplies What SMPs need to consider when advising clients on the VAT implications of crossborder supplies? For example: VAT rates applied across EU Member States EU invoicing rules Excise duties VAT obligations etc. 35
Access to EU Finance How SMPs can help their SME clients gain access to EU sources of finance? How to support SMEs in preparing an application for EU funds? Which EU funds could aid SMEs? 36
Sustainability Why sustainability is becoming increasingly relevant to SMPs? What is the business case for sustainable SMEs? Why SMPs are best placed to advise SMEs on sustainability and how they can get started on that? 37
Fédération des Experts-comptables Européens FEE Strategic priorities 2015 www.fee.be Connect with European Professional Accountants @FEE_Brussels 38
Continuity in strategic priorities Corporate reporting Public finance Audit & Assurance 39
Corporate reporting High-quality principles based global standards Improvement, simplification, innovation New developments (non-financial, country-bycountry, SMEs, <IR>, GRI ) 40
Public finance Showcase profession s public interest commitment Provide expertise (tax policy, public sector reporting, assurance) Create & seize opportunities 41
Audit & Assurance Implement and adapt to reforms Prevent damaging implementation & Anticipate development Encourage new services (non-audit, nonfinancial, <IR>) 42
Stay connected FEE website Monthly e-newsletter Connect with European Professional Accountants @FEE_Brussels @FEE_SMP +FEE Brussels 43