In this edition of our policy brief, we provide an update of some key regulatory and policy changes under way or anticipated in coming months in relation to the newly released digital agenda, to the on-going implementation of the energy strategy, to financial services, and to taxation. Learn about the latest policy developments with this monthly alert from our team in Brussels. For real-time updates, follow @MSL_Brussels or reach out to us on Twitter @msl_group.

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INSIGHTS BRUSSELS
A regular alert on key EU policy developments
Issue 25 | May 2015
It’s time to deliver

2. It’s time to deliver 3
Digital Agenda:
Speeding up EU digital transformation 4
1. Cross-border e-commerce 4
2. Digital networks and platforms 6
3. Data economy 7
Energy:
Towards a bolder EU energy policy 8
1. Energy security 8
2. Competitiveness 9
3. Sustainability 9
Financial Services:
Towards a Capital Markets Union fostering market-based
instruments 11
1. Capital Markets Union 11
2. Investment plan 11
Taxation:
Advancing efforts to combat tax avoidance 13
1. Corporate taxation policy 13
2. Review of tax agreements under EC competition rules 14
Contents
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3. It’s time to deliver
Editorial
Leonardo Sforza
Managing Director
MSLGROUP Brussels
“Europe will not be made all at once, or according to a single
plan. It will be built through concrete achievements which
first create a de facto solidarity.”
Robert Schuman
The declaration of French foreign minister Robert Schuman,
outlining on 9 May 1950 in Paris a new form of political
cooperation that launched the beginning of the European
Union project, is today more relevant than ever and should
remain a source of inspiration for European policy makers.
The first six months of the Juncker Commission have been
used to mark the shift in focus, governance and approach that
will be deployed throughout the European Commission’s five-
year mandate.
For the next six months, we should expect the delivery of
operational initiatives that are likely to keep policy makers as
well as stakeholders busy, as described in our brief. Although
we have seen an unusual legislative pause during the past
few months (mainly in terms of new regulatory proposals
put forward), this should not overshadow the Commission’s
ongoing activism and preparatory work to reshuffle policy
direction and the regulatory environment for energy, financial
services and industries affected by the digital revolution.
The Commission’s determination to act more boldly is evident
in the context of high profile antitrust investigations, which
have already provoked animated reactions outside of Europe
from Russia and the US. Other examples are the sector-
wide inquiries (also launched by Competition Commissioner
Margrethe Vestager) into e-commerce, and on subsidies
and aid provided by national governments to national power
companies; or the establishment of the European Fund for
Strategic Investments (promoted by EC Vice-President Jyrki
Katainen) which is expected to become operational during the
second half of the year.
Factors contributing to a more favourable economic
environment include lower oil prices, the depreciation of
the euro currency, the European Central Bank’s strong
commitment to lowering interest rates and improving credit
conditions, and rising private consumption. According to the
recent European Commission economic forecast, the outlook
for economic growth has improved, with real GDP in the EU
expected to increase 1.8% in 2015 and 2.1% in 2016. However,
internal economic growth remains uneven within the EU
and the pace of reform conducive to sustainable growth and
employment is still slow and patchy across countries. It will be
interesting to see the tone and scope of the country-specific
policy recommendations that the European Commission will
release later in May, and the way in which national authorities
decide to follow these up.
Meanwhile, nobody in Brussels is ignoring the uncertainty
surrounding a number of impending compelling issues
such as the economic and policy effects of the Greece case,
the UK’s EU agenda following the impending election,
geopolitical tension in Ukraine, the Middle East and Northern
Africa, or the effect of monetary policy normalisation in the
US.
In this edition of our policy brief, we provide an update
of some key regulatory and policy changes under way
or anticipated in coming months in relation to the newly
released digital agenda, to the on-going implementation of
the energy strategy, to financial services, and to taxation.
3

4. Speeding up EU digital transformation
On May 6th, the European Commission unveiled its Digital Single Market Strategy outlining its approach to
seizing the opportunities and addressing the challenges brought on by the digital revolution. The European
Commission’s policy paper supports in particular the objectives of removing barriers to cross-border on-line
activities, creating a favourable regulatory framework for investments in digital networks and capitalising
on the economic opportunities raised by the increasing use of data mining. The European Commission is
therefore focusing on three prioritised policy areas in which concrete action will be taken during the next two
years: cross-border e-commerce, digital networks and platforms, and the “Data Economy”.
Digital Agenda
1. Cross-border
e-commerce
The first pillar of the Digital Single
Market Strategy addresses the
challenges related to a number of
obstacles that prevent cross-border
online activities. The European
Commission identifies immediate
actions to be taken to close regulatory
loopholes and ensure better access to
online goods and services for consumers
and businesses.
Proposals to end geo-blocking
(2016)
The European Commission identifies
geo-blocking as a significant
cause of consumer frustration and
internal market fragmentation.
Geo-blocking refers to practices
used for commercial reasons by
online service providers that result
in the denial of access to websites
based in other Member States. The
European Commission intends
to make a legislative proposal
in the first half of 2016 to put an
end to geo-blocking, considering
it as “discrimination against the
consumer based on residence”.
The Commission is not specific,
however, as to how it will proceed
with phasing-out geo-blocking,
citing only the option of reviewing
either the e-Commerce framework
or the Services Directive In parallel,
the Commission is also launching a
Competition sector inquiry focusing
on the application of competition
law in the e-commerce area.
Proposal to reform copyright
regime (autumn 2015-2016)
A wide-scale review of EU copyright
legislation was announced last year. But
a recently leaked European Commission
document reveals that a deal is being
sought by the creative industries to
accept partial geo-blocking, in exchange
for a more aggressive copyright
enforcement policy. While the proposal
is expected to be unveiled in autumn this
year, the Strategy for the Digital Single
Market has already stipulated that the
Commission will propose measures
aimed at allowing full portability of
legally acquired content across the EU
and facilitating access to legally paid
cross-border services. The legislation
will also clarify the rules for the activities
of intermediaries in relation to copyright-
protected content. The Commission will
launch later in 2016 a process to review
enforcement of intellectual property
rights to more effectively address
unlawful activities of a commercial
nature.
Proposal on cross-border rules
for consumers and businesses
(2015)
After identifying issues concerning the
fragmented regulatory framework for
cross-border e-commerce, the European
Commission has announced that it will
present this year a legislative proposalon
cross-border rules to harmonise EU
rules for online purchases of digital
content. The proposal will include
EU regulations for protection against
defective content purchased online, as
well as key mandatory EU contractual
rights applicable to online sales of
tangible goods. These will include a
set of rights and obligations in sales
contracts for buyers and sellers, rules
on remedies for non-performance, and
rules for the minimum legal guarantee
period. Public consultations on this
proposal will be launched in coming
months.
4

5. Revision of regulation
on Consumer Protection
Cooperation (2015-2016)
Apart from the new proposal on cross-
border rules, the European Commission
also announced that it will review the
regulation on Consumer Protection
Cooperation with a view to develop
more efficient cooperation mechanisms.
The current Consumer Protection
Cooperation (CPC) Network brings
together public authorities in all EU
Member States that are responsible
for enforcing EU consumer protection
laws. The European Commission
wants to clarify and enhance these
enforcement powers and support more
efficient market surveillance and alert
mechanisms. The Commission also
plans to establish in 2016 an EU-wide
online dispute resolution platform.
Initiative on cross-border
parcel delivery (2016)
The European Commission aims to
ensure that the cost and efficiency of
parcel delivery is not an obstacle to
cross-border e-commerce. Although it
has not yet identified the legal nature of
its proposal, the European Commission
will prepare an initiative in the area of
parcel delivery with a focus on price
transparency and regulatory oversight.
Two years after this initiative is adopted,
the Commission will reassess the
need for additional and more stringent
measures.
Proposal on VAT regimes for
cross-border online trade
(2016)
The European Commission intends to
put forward a legislative proposal to
reduce the administrative burden on
businesses arising from different VAT
regimes and encourage cross-border
online trade. This proposal may include:
the option of extending the current
system of a single electronic registration
and payment mechanism for businesses
to include cross-border online sales
of tangible goods; the introduction
of a common EU-wide distance sales
turnover threshold for VAT applicable to
e-commerce suppliers; provision for a
single audit of cross-border businesses
for VAT purposes; and removal of VAT
exemptions for the import of small
consignments of goods purchased in
non-EU countries.
Digital Agenda
5

6. 2. Digital networks
and platforms
The second general aim of the Strategy
is to support the development of
reliable, high-speed, affordable
networks and services. The European
Commission aims to ensure that the
EU regulatory framework ensures a
level playing field between traditional
telecom companies and new internet
players competing on the same markets.
Revision of telecom rules
(2016)
Taking into account the fragmentation
of the telecom sector along national
borders and the lack of regulatory
consistency and predictability across the
EU, and noting that the current Telecom
Single Market package discussions
are focused primarily on net neutrality
and roaming due to the reluctance of
Member States to adopt more ambitious
provisions, the European Commission
intends to present in 2016 proposals to
further reform the telecoms regulatory
framework. The Commission will focus
on radio spectrum management,
harmonisation of rules, investment
incentives in high-speed broadband and
more efficient regulatory framework.
Revision of Audiovisual Media
Services Directive (2016)
Some stakeholders in Brussels advocate
that the scope of the Audiovisual Media
Services Directive should be broadened
to encompass services that fall outside
the definition provided by the Directive
– e.g., platforms with content over which
no editorial control is exercised or Video
on demand platforms. The Commission
has announced that it will review the
Audiovisual Media Services Directive in
2016 and focus on issues related to on-
demand platforms, levies, advertisement
and protection of minors. It will also
put emphasis on measures to promote
catalogues of European works on Video
on-demand platforms.
Comprehensive assessment
of the role of online platforms
(2016)
Being aware of the fact that the market
power of some online platforms in the
digital economy raises a number of
issues (search engines, social media,
app stores, sharing economy platforms,
intermediaries), the Commission
has announced that it will carry out
a comprehensive assessment on the
role of these platforms in terms of
transparency (including in search
results), use of data collected, relations
between platfomrs and suppliers, and
platform compatibility.
The Commission will also assess how
best to tackle illegal content on the
internet, in particular when information
is contrary to public interest (such as
terrorism or child pornography) .
Revision of E-Privacy Directive
(2016)
As regards cybersecurity, the European
Commission remarks that the scope
of the e-Privacy Directive is limited to
traditional telecom companies and
not to newer internet-based service
providers. The Commission wants to
ensure that citizens and businesses have
the best possible safeguards and legal
certainty regarding their personal data in
the digital world. It will therefore review
the E-Privacy Directive once the new
general EU rules on data protection are
agreed (adoption expected by the end of
2015).
Digital Agenda
6

7. 3. Data economy
The third objective of the Strategy is to maximise the economic
benefits of new technologies and exponential growth and
availability of data to foster innovation, growth and jobs. The
Commission has already launched a number of consultations to
prepare new legislative and non-legislative proposals to develop
a “European Digital Economy with Growth Potential”.
Initiatives on free data flow (2016)
The European Commission aims to put forward a number of
initiatives related to data flow. The Commission will launch work
on a ‘Free Flow Data Initiative’ to prevent restrictions imposed by
Member States on the free movement of non-personal data and
unjustified data location restrictions for data storage or cloud
computing. It will also explore the option of addressing the
emerging issues of ownership and access to non-personal data
in situations of business-to-business or machine-to-machine
data. Specific measures for transport data may be also included
to encourage better da ta services and new business solutions.
The European Commission will also launch a European Cloud
Initiative to address the issues of cloud services certification,
switching of cloud providers and contracts.
New standards for industrial internet (2015)
The European Commission intends to improve its
standardisation system to deliver standards that can be accepted
internationally, particularly in terms of defining essential
technological standards that are lacking for “Industry 4.0”
(Internet of Things, cybersecurity, big data, cloud computing). As
part of this, the Commission will also address several essential
sectorial standards in the areas of health (telemedicine,
e-health), transport (interoperable transport plan, e-freight) and
energy (smart metering).
New business registers (2017)
Today, business registers are required to make information and
documents available to the general public in accordance with
national law. From 2017, the European Commission wants to
make the interconnection of business registers mandatory, to
provide citizens and businesses with greater cross-border access
a to data on European companies.
New e-government action plan (2016)
The European Commission also intend to speed up the
development of e-Government, and will present a new
e-government action plan in 2016. This action plan will make
mandatory the use of the “European interoperability framework”
used by national administrations for efficient communication
between themselves as well as with citizens and businesses.
It will also work towards a “Single Digital Gateway” to create a
seamless and user-friendly system for citizens and businesses
and accelerate Member States’ transition towards full electronic
procurement and interoperable e-signatures. e-signatures.
Cross-BorderE-commerceDataNetworksDataEconomy
Proposal to end
Geo-blocking
Proposal for a reform of
Copyright Regime
Proposal on
cross-border rules
Initiative on
Parcel Delivery
Proposal on VAT regimes for
cross-border online trade
Inquiry into
geo-blocking
Commission
Proposal
Internal
negotiations
Inter-institutional
negotiations
Results & Public
Consultation
Commission
Proposal
Internal
negotiations
Inter-institutional
negotiations
Transposition &
Implementation
Proposal to reform the
Telecom rules
Proposal to reform the
Audiovisual Media Services
Directive
Proposal to reform the
e-Privacy Directive
Initiatives on
Free Data Flow
Initiative for New Internet
Standards
Public
consultation
Internal
negotiations
Commission
Proposal
Inter-institutional
negotiations
Publication of
Industry report
Commission
Initiative
Self-regulation
by industry
Assessment Report & Potential
Commission Proposal
Public
consultation
Internal
negotiations
Commission
Proposal
Inter-institutional
negotiations
Connected Continent
Package adopted
Public
consultation
Implementation Internal
negotiations
New Commission
Proposal
Public
consultation
Internal
negotiations
Commission
Proposal
Data Protection
Package adopted
Public
consultation
Implementation Internal
negotiations
New Commission
Proposal
Launch of Initiative on
Data flow
Implementation & Potential
further initiatives
Launch of new standardization
system for Industrial Internet
Implementation & Potential
further initiatives
7
2015 20172016
Timeline 2015-2017

8. Towards a bolder EU energy policy
During their March Summit in Brussels, EU Heads of State or Government backed the European
Commission’s long-awaited “Strategy for a Resilient Energy Union with a Forward-Looking Climate Change
Policy”. The Strategy is based on the central premise of the interplay between pan-European principles and
28 national regulatory frameworks. It is aimed at “resetting the EU’s energy policy” by identifying legislative
and non-legislative actions to be taken in relation to three specific objectives: security, competitiveness and
sustainability.
Energy
1. Energy security
The European Commission’s main goal
is to put forward initiatives to prevent
supply shortages or disruptions and
reduce dependency on particular fuels,
energy suppliers and routes. The below-
mentioned proposals are likely to have
significant short- to long-term impact on
European energy companies’ business
models.
Revision of Security of Gas
Supply Regulation (2015-
2016)
The Commission aims to ensure stronger
cooperation in responding to potential
gas supply disruptions by introducing
common crisis management tools and
solidarity principles in the upcoming
revision of the Security of Gas Supply
Regulation. The Commission also
intends to assess options for demand
aggregation mechanisms for collective
purchasing of gas. As the world’s biggest
energy consumer, the European Union
wants to explore ways to buy gas as
a group. The debate among Member
States and international partners
promises to be intense, however, as the
WTO and IEA have already warned the
EU of the danger of forming a buyers’
cartel.
Revision of Security of
Electricity Supply Directive
(2015-2016)
The Commission has announced its
intention to re-open discussions on the
revision of the Security of Electricity
Supply Directive. The revision will
establish a range of acceptable risk
levels for supply interruptions and take
into account progress in cross-border
flows, variable renewable production,
demand response and storage
possibilities. The Commission is also
considering carrying out stress tests
on the EU’s electricity system in 2016,
similar to those carried out in 2014
for the gas network. The Commission
has also taken a step forward in the
discussion on capacity markets, and
will propose a new European electricity
market design in 2015 which will be
followed by legislative proposals in
2016. Heated debates in energy circles
on the use of capacity markets are also
anticipated.
Adoption of a new European
LNG strategy
The Commission is considering the
potential of liquefied natural gas as
a back-up in crisis situations. The
Commission will work on the preparation
of a comprehensive LNG strategy to
better link LNG access points within
the internal market, address cost issues
and remove obstacles to LNG imports,
particularly from the United States.
Revitalisation of European
energy diplomacy
With the aim of carrying more weight
on the global scene, the Commission
has proposed the establishment or
renewal of energy partnerships with
major producers and transit countries.
Particular objectives: to make significant
progress on a Mediterranean Gas hub;
to adopt a Strategic Energy Partnership
with Algeria, a Strategic Alliance
with Turkey, and a Strategic Energy
Relationship with Ukraine; to renew
the Strategic Alliance with the Energy
Community (Non-EU, Central and
Eastern European Countries); and renew
partnerships with Norway, United States
and Canada.
In addition to these energy partnerships,
the European Commission is pursuing
its trilateral rounds of negotiations
with Russia and Ukraine with a view to
achieving balanced energy agreements
on gas supplies. These rounds of
negotiations are of utmost importance
for EU energy imports, Ukraine being
a key transit country with over 50%
of Russian gas supplies to the EU
transmitted through Ukrainian pipelines
8

9. 2. Competitiveness
The European Commission acknowledges the
underperformance of the EU energy system in terms of
investment, competition and regulatory fragmentation. The
following initiatives, of utmost importance to the energy
business community, are proposed to address such a gap.
Full implementation of Third Energy Package
(2015-2016)
The Commission will ensure stricter enforcement of existing
energy legislation, in particular the 3rd Energy Package. In
practice, this means the European Commission may exercise
its power to launch infringement procedures against Member
States that have not fully implemented EU energy rules. Over
the last few years, the Commission has noticed that Member
States have been particularly reluctant to implement the
“unbundling rules” separating energy production and supply
entities.
Acceleration of funding for trans-European
infrastructure projects (2015)
The Commission has noted that ongoing calls for projects
are being funded by the European Investment Bank, the
Connecting Europe Facility and smart financing under
the European Structural Investment Funds. For projects
not covered by these funds, the Strategic Investment Plan
will further facilitate access to EU funding this year. The
Commission has also announced the creation of a dedicated
Infrastructure Forum in 2015 to gather efforts from Member
States, regional initiatives and EU institutions.
Phase-out of regulated end-users tariffs (2016)
The European Commission deems that insufficient progress
has been made to guarantee greater consumer choice of
supplier. The Commission stresses the need to pass on recent
decreases in oil prices to citizens, by lowering prices. The
Commission proposes to further support Member States’
initiatives to roll-out smart metres and grant consumers
better access to information about switching suppliers. The
Commission also intends to phase out regulated end-users
tariffs by 2016, as it considers them detrimental to the well-
functioning of the internal market.
Reform of institutional set-up (2015- 2016)
The European Commission intends to significantly reinforce
the supervisory powers of the Agency for Cooperation of
Energy Regulators (ACER) and the European Networks
of Transmission System Operators for Electricity and Gas
(ENSTO-E/G). ACER currently only takes decisions at the
request of national regulators and acts through non-binding
recommendations. The Commission wants to empower
the European agency to take more binding decisions. The
Commission also plans to prepare an ambitious legislative
proposal to redesign the electricity market, including
provisions on intraday markets, super-grids and storage
technologies.
Update of Strategic Energy Technology Plan
(2016)
As regards research and innovation, the Strategy for the
Energy Union has announced the future creation of a multi-
disciplinary scientific committee to best prepare for deep
decarbonisation pathways. The Commission will also update
its Strategic Energy Technology Plan to better identify and
integrate key enabling technologies, focusing on carbon
capture and storage (CCS) technologies.
3. Sustainability
The Commission considers that more should be done on the
energy efficiency front to moderate energy consumption, on
decarbonisation (due to be the main objective of EU climate
policy), and to ensure that research and innovation play a more
central role.
Adoption of 2030 climate and energy framework
(2015-2016)
At the October European Council last year, the EU informally
agreed on a 2030 climate and energy framework with
specific targets for energy savings and share of renewable
energies. The Commission will articulate later in 2015 a 2030
climate and energy package to translate these objectives
into legislation. In this package, the Commission will present
proposals to reform the EU Emissions Trading System (ETS),
with the expected adoption of a Market Stability Reserve, and
will include measures to incorporate the land and forestry
sector in the system.
Adoption of new Renewable Energy Package
(2016-2017)
The European Commission will propose a new Renewable
Energy Package in 2016-2017, building on the agreed target
of 27% renewable energy in the EU energy mix by 2030.
New rules are expected to progressively harmonise national
support schemes for renewables, with a view to addressing
market distortions, improving cost-effectiveness, avoiding
overcompensation and ensuring investor confidence. The
Commission also intends to include in the upcoming package
a specific section on sustainable biomass and biofuels. It
is expected that this section will take more consideration
of biofuels’ impact on the environment, land-use and food
production.
9

10. Revision of all relevant energy efficiency
legislation (2015-2016)
The Commission has announced the review of all relevant
energy efficiency legislation during the next two years. Focus
will be on revision of the Eco-design and Energy Labelling
Directive, the Energy Performance of Buildings Directive, and
the Energy Efficiency Directive. In doing so, the Commission
intends to improve synergies between energy efficiency
policies.
Adoption of Road Transport Package (2016)
The Commission’s plan also includes tackling the issue of fuel
savings in the transport sector. The Commission intends to
propose a comprehensive road transport package promoting
greater efficiency in infrastructure pricing, enhancing energy
efficiency and creating the right market conditions for an
increased deployment of alternative fuels. The Commission
has already clarified its intention of basing this package on
polluter-pays and user-pays principles.
Adoption of new strategy on heating and cooling
The European Commission has noted that huge efficiency
gains can be made with respect to district heating and cooling.
It therefore intends to propose a strategy on heating and
cooling to simplify access to existing financing and offer “off-
the-shelf” financing templates to interested stakeholders.
Proposition of “Smart Financing for Smart
Buildings” initiative
Considering the great potential for energy efficiency gains in
buildings, the Strategy for the Energy Union has announced
the upcoming creation of a new financing tool to leverage
major investments in renovating buildings.
SecurityofSupplyCompetitivenessSustainibility
Security of Electricity
Supply Directive
Security of Gas
Liquiefied Natural
Gas (LNG) Strategy
2015 20172016
Implementation of
3rd Energy Package
Implementation of
Infrastruture Package
Strategic Energy
Technology Plan
2030 Climate
& Energy Package
Renewable Energy
Package
Energy Efficiency
Directives
European electricity
market design
Commission
Proposal
Internal
negotiations
Inter-institutional
negotiations
Electricity
Stress Tests
EU study on joint
gas purchases
Commission
Proposal
Internal
negotiations
Inter-institutional
negotiations
Study on LNG as
a shipping fuel
Publication
of Strategy
Public
consultation
Follow-up Initiatives &
EU Funding
National
Implementation
Potential
Case rullings
Potential opening
of Infringement Proceedings
Public
consultation
Follow-up Initiatives & EU
Funding
Publication
of Strategy
Pre-Agreement on
objectives
Commission
Formal Proposal
Inter-institutional
negotiations
Implementation21COP Paris Conference
Progress report on implementation of
existing legislation
Public
consultation
Internal
negotiations
Public
consultations
Internal
negotiations
Commission
Proposals
Inter-institutional
negotiations
10
Call for
Projects
EU
Funding
EU Selection
Process
Call for
Projects
EU
Funding
EU Selection
Process
Call for
Projects
EU
Funding
EU Selection
Process
Commission
Proposal
Timeline 2015-2017

11. Towards a Capital Markets Union
fostering market-based instruments
Investment in companies and infrastructures, notably in SMEs, remains lower than during the pre-crisis
period and continues to rely heavily on bank funding. The Commission therefore deems that the recent
“Banking Union” proposal needs to be complemented with initiatives aimed at reducing this dependence on
banks by fostering other market-based credit options.
Two recent Commission initiatives reflect this commitment, the most important one being the Commission´s
ambition to create a true and fully integrated Capital Markets Union that will unlock funding for European
businesses and boost growth in the European Union. The Commission’s second complementary flagship
project, the “Investment Plan for Europe” aims to make available a new type of collective investment fund
targeting investment in long-term projects.
Financial services
1. Capital Markets
Union
The Capital Markets Union (CMU) is
one of the Commission´s top priorities.
The CMU will comprise an action plan
for improving financing of the economy
through more efficient market-based
instruments intended to complement
traditional European banking tools.
Consultations for upcoming
Capital Markets Union action
plan (2015)
On 18 February 2015, the Commission
launched a public consultation
addressing the concrete hurdles to be
removed for achieving a Capital Markets
Union. The Commission simultaneously
launched two distinct consultations: the
first relates to high-quality securitisation
while the second concerns review of
the Prospectus Directive (the EU-wide
regime for capital markets prospectuses
required when a public offer of securities
is made or when a company is seeking
admission to a regulated market).
Interested parties have until 15 May
2015 to respond to the consultation and
present their views and concerns to the
Commission.
Based on the inputs provided during the
consultation, the Commission is due to
unveil during the third quarter of 2015
an action plan of operational proposals
to be pursued.
The broad position of EU finance
ministers is expected to be adopted at
the ECOFIN Council next June.
Adoption of proposal to set
new standards for financial
benchmarks (2015)
On 13 February 2015, as part of its
old regulatory reform agenda, the
Council lent its support to the European
Commission´s proposal for a regulation
to combat the manipulation of financial
benchmarks.
In the aftermath of investigations
into manipulation of the LIBOR and
EURIBOR benchmarks that undermined
public trust in financial benchmarks, the
Commission proposed new standards
in September 2013 to strengthen
the reliability of benchmarks used in
financial instruments (e.g., bonds,
shares, futures and swaps) and financial
contracts (e.g., mortgages and consumer
contracts).
This proposal of regulation is aimed
at restoring market confidence in
indices used as benchmarks for
financial products and services, while
implementing the same principles
as those agreed at the international
level by the International Organisation
of Securities Commissions (ISCO)
in 2012 and 2013. A benchmark
is an index or indicator, calculated
from a representative set of data or
information, which is used to price a
financial instrument or financial contract
or to measure the performance of an
investment fund.
These new standards are expected
to do more to improve the accuracy
and integrity of these benchmarks in
three ways. First of all, contributors
to benchmarks will be subject to prior
authorisation and on-going supervision,
depending on benchmark type (e.g.,
commodity or interest-rate benchmarks).
Secondly, these new rules will improve
the governance of benchmarks (e.g.,
conflict of interest management) and
add further requirements in terms
of how a benchmark is produced.
Finally, the rules are meant to ensure
appropriate supervision of “critical
benchmarks” (e.g., Euribor and Libor),
the failure of which may pose risks to
many market participants and to the
functioning and integrity of financial
stable markets.
The European Parliament is still in
the process of finalising its opinion on
the Commission’s proposal. The EP’s
opinion is not expected to be issued
before June 2015, after which the EP will
begin negotiations with the Council to
reach a final agreement.
2. Investment plan
On 10 March 2015, the European
Parliament agreed to support the
Commission´s proposal to create a new
investment fund framework aimed at
facilitating long-term investment. The
proposal was endorsed by the Council
in April and will soon enter into force
following its publication in the EC official
journal.
Setting up European long-term
investment funds (ELTIFs)
(2015-2016)
The recently agreed European long-
term investment funds (ELTIFs) are
designed to increase the amount of non-
bank financing available to companies
investing in the EU´s real economy.
Currently, existing long-term investment
funds are only to raise money in one

12. Member State, which leads to fragmentation of the single
capital market and limits the funds’ growth.
This new type of collective investment framework aims to
boost financing available to companies in search of long-
term capital for projects related to energy, transport or
even social housing, schools and hospitals. The intention is
that investment fund managers will be able to offer long-
term investment opportunities to both institutional and
private investors. Accordingly, the ELTIFs would constitute
an important part of the Capital Markets Union (CMU) and
complement the €315bn Junker´s landmark investment plan
for Europe.
In order to benefit from this cross-border passport, these new
fund vehicles would need to comply with strict rules aimed at
protecting investors and the companies they invest in.
To qualify as an ELTIF, funds would need to invest at least
70% of their money within five years in specific projects,
including: unlisted companies or certain listed SMEs in need
of long-term capital, real assets for which development is
dependent on long-term capital, intellectual property, and
other intangible assets. The 30% buffer, however, may be held
as UCITS-eligible assets.1
In addition, these funds may only be proposed by a manager
authorised under the Alternative Investment Managers
Directive (AIFMD) and thus subject to AIFMD rules, including
the obligation to have a depositary. Investors would not
normally be entitled to have their funds returned to them for a
specific period of time (e.g., at least ten years after their initial
investment), thereby allowing for long-term investments in
illiquid assets. This restriction, however, would need to be
disclosed up front. In exchange for their patience, investors
would be rewarded with a regular income stream and an
appropriate return for committing their money.
ELTIFs differ markedly from UCITS, which must offer investors
the chance to exit at least twice a month. However, as per
specific and stringent requirements, ELTIF managers would
be allowed to offer investors the option of withdrawing a
proportion of their invested funds early, although only after
five years. To avoid speculative use, ELTIFs may only use
derivatives to manage currency risks in relation to the assets
they hold, while the borrowable amount would be limited.
In addition, funds offered to investors such as pension funds
would be required to provide additional safeguards, including
a limitation on the amount that can be invested (up to 10% of
assets under management).
12CapitalMarketsUnionFinancialservices
Proposal on Credit
information of SMEs
Proposal on high-quality
securisatiom
Proposal to review the
Propsectus Directive
Proposal on EU long-term
investment funds (ELTIFS)
Proposal on European
private placement markets
Proposal on
financial benchmarks
Investment plan
for Europe
Proposal to review
IORPs
Public
consultation
Commission’s
proposal
Internal
negotiations
Inter-institutional
negotiations
Results and
Action Plan
Commission
Proposal
Internal negotiations
Consultation for «29 Regime »
Transposition and
implementation
Inter-institutional
negociations
Implementation
Public
consultation
Commission’s
proposal
Internal
negotiations
Inter-institutional
negotiations
Results and
Action Plan
Public
consultation
Commission’s
proposal
Internal
negotiations
Inter-institutional
negotiations
Results and
Action Plan
Public
consultation
Results and
Action Plan
Commission’s
proposal
Internal
negotiations
Inter-institutional
negotiations
Internal
negotiations
Inter-institutional
negotiations
Implementation
Inter-institutional
negotiations
Entry into
operation
First
Funding
Progress
review
Inter-institutional
negotiations
2015 20172016
Timeline 2015-2017

13. Advancing efforts to combat tax avoidance
The European Council stressed in December last year the urgent need to advance efforts to combat tax
avoidance and aggressive tax planning. Heads of State or Government are expected to assess progress
made at the next EU Summit, in June. On the European Parliament’s side, MEPs decided to set up a special
committee (“TAXE”) tasked with investigating the extent to which special tax deals designed by some EU
Member States distort tax competition. This special committee is expected to present its conclusions after
the summer.
Facing heavy pressure from both institutions to take appropriate measures to effectively combat tax dumping,
the European Commission reacted promptly by setting out an ambitious agenda to tackle corporate tax
avoidance and harmful tax competition in the EU. The Commission is acting simultaneously on two fronts:
using its power more effectively to put forward legislative proposals in the area of corporate taxation policy,
and launching investigations under EU competition law into recent Member States’ tax decisions.
Taxation
1. Corporate taxation
policy
Adoption of Directive on
automatic exchange of tax
rulings (2015-2016)
In its 2015 work program, the
Commission highlighted its
determination to combat tax avoidance
by putting in place an automatic
exchange of information on tax rulings.
In line with this ambition, the
Commission unveiled on 18 March 2015
its Tax Transparency Package aimed
at efficiently combatting corporate
tax avoidance. The key feature of this
package is a proposal of directive
introducing an automatic exchange of
information between Member States
on their tax rulings.2
Until now, it was at
the Member States´ discretion to decide
whether a tax ruling was relevant to
another Member State. This proposal is
designed to ensure that Member States
are given the information they need to
protect their tax bases and efficiently
target companies that try to avoid paying
their fair share of taxes.
The terms of this proposal will subject
Member States to a strict timeline: every
three months, national tax authorities
will be required to issue a brief report
to all other Member States covering all
cross-border tax rulings issued during
that time period. The information
provided will include the names of the
taxpayer and group, a description of the
issues addressed in the tax ruling, and
details on the criteria used to determine
an advance pricing arrangement. The
report will also identify the Member
States(s) and other taxpayers most
likely to be affected. Member States will
then be able to ask for further detailed
information on a particular ruling if need
be. However, notwithstanding criticism,
the new plan does not require official
publication of tax rulings.
This system of automatic exchange
of information is aimed at enabling
Member States to detect abusive tax
practices used by companies early on
and to take necessary action. The overall
spirit of the proposal is to foster ´peer-
to-peer´ pressure amongst Member
States to promote a healthier tax
competition regime.
As it relates to tax harmonisation,
the Council is to adopt the proposal
of directive by unanimity after
due consultation of the European
Parliament.
The European Commission has set
an ambitious timeline. It expects the
Council to adopt its proposal by the end
of 2015 and wants the new measures to
enter into force as of 1 January 2016.
Initiative on new transparency
requirements for multinational
companies (2015-2016)
Another initiative included in the
Tax Transparency Package relates to
new transparency requirements for
multinational companies in all sectors,3
and a review of the Code of Conduct on
Business Taxation aiming to ensuring
fairer and more transparent tax
competition within the EU and a more
reliable assessment of the level of tax
evasion and avoidance in the EU.
The Commission is expected to present
an action plan on corporate taxation
before the summer.
Action plan on a common
consolidated corporate tax
base (2015-2016)
During an exchange of views with
the European Parliament´s special
committee on tax rulings on 30
March 2015, Commissioner Moscovici
announced that the Commission was
considering taking further action
regarding the initial proposal on a
common consolidated corporate tax
base. The first EC proposal in this
area dates back to March 2011, when
the Commission initiated a proposal
for a common consolidated corporate
tax base (CCCTB), aimed at providing
companies with a single set of rules
for an EU-wide calculation of their tax
liabilities.
To be enacted as law, any decision in this
area requires the unanimous backing
of all 28 Member States in the Council.
Given the divergence of opinion among
Member States on this issue, this is
unlikely to be translated into a common
decision any time soon. The issue will
be included in the Commission´s action
plan on corporate taxation due to be
released before next summer.
13

14. 2. Review of tax
agreements under EC
competition rules
In June 2014, the Commission opened
three in-depth investigations into
whether tax agreements concluded
by Ireland, the Netherlands and
Luxembourg, respectively, with
Apple, Amazon, Fiat and Starbucks
constituted illegal state aid that
distorted competition. The Commission
is expected to issue its decision on
the findings of these investigations
after this summer. In February 2015,
the Commission also opened another
in-depth investigation into Belgium´s
“excess profit” rulings.
In the event the subsidies awarded to
the above-referenced corporations
are deemed illegal state aid, the
Commission is authorised to order
that the subsidies be returned to the
country from which they were paid. The
initiation of an in-depth inquiry provides
interested third parties and concerned
Member States with an opportunity
to submit their comments, but does
prejudice the inquiry’s outcome.
The Commission´s preliminary enquiries
have shown that the quality and
consistency of tax authority scrutiny
differ substantially across the Member
States.
Investigations of tax authority
decisions in the Netherlands
(2015)
It appears from the Commission´s
assessment that the Netherlands
generally proceeds with thorough
assessment of comprehensive
information provided by taxpayers
and that, accordingly, the Commission
does not expect to find systematic
irregularities in Dutch tax rulings.
Investigations of tax authority
decisions in Luxembourg
(2015-2016)
Conversely, at this stage of the
procedure, the Commission is concerned
that the tax ruling granted to Starbucks
by Luxembourg provides a selective
advantage to the US coffeehouse chain.
After labour unions and a charitable
organisation accused McDonald’s of
avoiding taxes in Luxembourg in a
report released in February 2015, the
Commission also sent a letter to the
Luxembourgish tax authorities requiring
more information on their tax rulings
involving the US fast-food chain. The
report stresses that McDonald´s would
have benefited from a generous tax
regime that allows companies to benefit
from a low tax rate on income generated
from intellectual property.
Investigations of tax authority
decisions in Ireland (2015-
2016)
The Commission has similar concerns
regarding the tax ruling granted by
Ireland to Apple. Indeed, despite
a tightening of the transfer pricing
rules over the years, the Commission
is worried that the significant degree
of discretion the tax administration
had in the past may have been used
to grant a selective advantage to the
US technology multinational, thereby
reducing its tax burden below the level
it should have paid based on the correct
application of the tax rules.
Investigations of tax authority
decisions in Belgium (2015-
2016)
In February 2015, the Commission
launched an in-depth investigation into
a Belgian corporate tax scheme (the
“excess profit” rulings). These rulings
have been issued by Belgium in an
attempt to attract foreign companies
to the country. According to Margrethe
Vestager, Commissioner for Competition,
they may allow companies to lower their
tax bill by up to 90 per cent. These tax
rulings allow multinational companies
to exclude profits from their tax bills
that allegedly stem from the advantage
of being part of a multinational group.
Such profits include research and
development funds, economies of scale,
and intangible assets such as reputation.
14Corporate
taxation
Competition
investigations
Proposal on automatic
exchange of tax rulings
Proposal on further
transparency requirements
Proposal
of CCCTB
Ireland
Luxembourg
Netherlands
Belgium
Commission
Proposal
Potential
Council Approval
Council negotiations
Parliament opinion
Transposition &
Implementation
Transparency
Package
Potential
Council Approval
Commission
proposal
Transposition &
Implementation
Potential
Council Approval
Potential Commission
revised proposal
Transposition &
Implementation
Action
Plan
Action
Plan
Ongoing
investigations
Investigations
outcome
Change of national practice/law
or legal proceedings
Potential
ECJ’s ruling
Ongoing
investigations
Investigations
outcome
Change of national practice/law
or legal proceedings
Potential
ECJ’s ruling
Ongoing
investigations
Investigations
outcome
Potential legal
proceedings
Ongoing
investigations
Investigations
outcome
Change of national practice/law
or legal proceedings
Potential
ECJ’s ruling
2015 20172016
Timeline 2015-2017

15. For further information
leonardo sforza
LEONARDO.SFORZA@MSLGROUP.COM
romain seignovert
ROMAIN.SEIGNOVERT@MSLGROUP.COM
astrid burhöi
ASTRID.BURHOI@MSLGROUP.COM
WEB
WWW.MSLGROUP.COM
TWITTER
@MSL_BRUSSELS
Office
SQUARE DE MEEÛS 23, 1000 BRUSSELS, BELGIUM
15
1. UCITS: Undertakings for Collective Investment in Transferable Securities, an investment vehicle subject to a single European regulatory regime and thus eligible to be marketed across the EU without
regard to country of domicile.
2. Tax rulings are confirmations or assurances provided by tax authorities to taxpayers regarding how tax will be calculated. Tax rulings are typically issued to provide taxpayers with legal certainty
regarding the tax treatment of large or complex commercial transactions they intend to conduct. Accordingly, tax rulings per se do not pose problems when issued by Member States. They become
problematic when they in effect give preferential treatment to certain companies or facilitate aggressive tax planning. One example of this is when tax rulings offering low tax rates in one Member
State encourage companies to artificially shift profits there, leading to serious revenue losses for other Member States.
3. Currently, such transparency requirements only exist for banks and large extractive and logging industries.
Notes

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