PURPOSE: to modernise the VAT rules in the context of
cross-border business to consumer (B2C) e-commerce (administrative
cooperation and fight against fraud).
PROPOSED ACT: Council Regulation.
ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts
the act after consultation with the European Parliament but without
needing to follow the latters opinion.
BACKGROUND: this proposal is part of the package of
legislation on modernising VAT for cross-border B2C e-commerce. The
package includes a proposal
for a Council Directive amending Directive
2006/112/EC and Directive
2009/132/EC as regards certain value
added tax obligations for supplies of services and distance sales
of goods.
The proposal to amend Regulation
(EU) No 904/2010 on administrative cooperation and combating
fraud in the field of value added tax is an important element of
the package. It provides the basis for the underlying IT
infrastructure and the necessary cooperation by
Member States to ensure the success of the extension
of the Mini One Stop Shop (MOSS) to services other than
telecommunications, broadcasting and electronically supplied
services and to distance sales of goods, both within the Community
and from outside the Community.
The overall package is estimated to increase VAT
revenues for Member States by EUR 7 billion annually and reduce
regulatory costs for business by EUR 2.3 billion
annually.
The proposal also results from the Commission
communication of May 2015 entitled Strategy
for Digital Single Market for Europe' and its communication of
April 2016 on an action plan on VAT entitled 'Towards
a single EU VAT area,
IMPACT ASSESSMENT: in terms of the impact assessment,
the preferred option, which included coordination of audits, was
estimated to lead to higher reductions in compliance costs for
businesses compared to the alternatives.
CONTENT: the proposal aims to amend and supplement
the provisions concerning the Mini One Stop Shop (MOSS)
provided for in Council Regulation (EU) No 904/2010 following the
amendments that are being made to the VAT Directive.
These provisions cover the rules and procedures for
the exchange by electronic means between taxable persons and their
tax administration as well as between Member States' tax
administrations of VAT information concerning VAT identification,
VAT returns and VAT payments within the MOSS.
The proposal:
- contains the provisions relating to the exchange of
information between Member States concerning the identification
of taxable persons making use of the MOSS, VAT returns and VAT
payments. They mirror the existing provisions and extend them to
services other than electronic services and to distance sales of
goods;
- provides that the Member State of importation
should verify the validity of the VAT identification number to
be provided to the customs authorities upon importation of goods
for which VAT is declared and paid using the MOSS. A valid VAT
identification number is a condition for the application of the
exemption upon importation of such goods;
- provides that requests for records by Member States to
taxable persons and administrative inquiries should be
coordinated by the Member State of identification, so as to
avoid uncoordinated requests for records or administrative
inquiries by several Member States of consumption;
- provides for the payment of a fee of 5% to be paid
by the Member States of consumption to the Member State of
identification in order to compensate for the investment needed to
update the MOSS IT system following the extension of its scope,
ongoing maintenance costs and the resources spent controlling
business established in that Member State;
- provides for the possibility for the Commission to
automatically access information related to the MOSS stored
in the Member States' electronic systems, with the exception of any
personal data;
- confers implementing powers on the Commission
to determine the data to be included in the information exchanges
concerning identification, VAT returns, VAT payments, requests for
records or administrative enquiries, etc., between taxable persons
and Member States or between Member States as well as the technical
means for the submission or transmission of this
information.
BUDGETARY IMPLICATIONS: this element of the package is
estimated to have important positive budgetary implications. The
coordination of audits together with the incentive of the
administrative fee should result in risk-based audits. A more
efficient audit process which focuses on audit yield should lead to
higher compliance rates compared to the alternative of an
uncoordinated approach which can needlessly tie up
resources.