On 5 December, ECOFIN reached agreement on the Commission’s proposal on a new set of VAT rules for e-commerce across the EU, intended to come into force in stages by 2021. These are based on the destination principle, ensuring that VAT is paid in the member state of the final consumer. The new rules will:
allow VAT on cross-border sales under €10,000 a year to be handled according to the rules of the home country of the smallest businesses by 1 January 2019;
allow all companies selling goods to customers online to deal with their EU VAT obligations through a single online portal (the ‘one-stop shop’) in their own language;
make large online marketplaces responsible for ensuring VAT is collected on sales made on their platforms by non-EU companies to EU consumers, including goods stored in fulfilment centres; and
remove the VAT exemption on imports of small consignments worth less than €22 from non-EU countries, while allowing simplified customs clearance for consignments valued up to €150 from trusted non-EU traders or marketplaces registered with the VAT one-stop shop.
Welcoming the agreement, EU taxation commissioner Pierre Moscovici said: ‘piece by piece, a new VAT system is being built that is fit for purpose and within which internet companies operating across borders can thrive’.
‘Today's agreement also bodes well for the more fundamental VAT reform in the EU that is so urgently needed’, he added.
The Commission has followed up its October communication on the ‘cornerstones’ for a new definitive single EU VAT area with a set of proposals for increased exchange of information and cooperation between national tax authorities and law enforcement bodies. These include:
a new online system for sharing information within the ‘Eurofisc’ network of member states’ fraud risk analysts and new powers for Eurofisc to coordinate cross-border investigations;
new lines of communication and data exchange between tax authorities and OLAF, Europol and the newly created European Public Prosecutor Office (EPPO);
sharing of information on imports from outside the EU and strengthened cooperation between tax and customs authorities in all member states; and
giving Eurofisc officials access to car registration data from other member states.
Exchange of information on business and cross-border sales between member states’ tax authorities currently relies heavily on the manual processing of information. There is no systematic sharing of VAT information and intelligence on organised gangs involved in the most serious VAT fraud with EU enforcement bodies.
These proposals take forward the Commission’s April 2016 VAT action plan and will now go forward to the EU Parliament for discussion.
On 5 December, ECOFIN reached agreement on the Commission’s proposal on a new set of VAT rules for e-commerce across the EU, intended to come into force in stages by 2021. These are based on the destination principle, ensuring that VAT is paid in the member state of the final consumer. The new rules will:
allow VAT on cross-border sales under €10,000 a year to be handled according to the rules of the home country of the smallest businesses by 1 January 2019;
allow all companies selling goods to customers online to deal with their EU VAT obligations through a single online portal (the ‘one-stop shop’) in their own language;
make large online marketplaces responsible for ensuring VAT is collected on sales made on their platforms by non-EU companies to EU consumers, including goods stored in fulfilment centres; and
remove the VAT exemption on imports of small consignments worth less than €22 from non-EU countries, while allowing simplified customs clearance for consignments valued up to €150 from trusted non-EU traders or marketplaces registered with the VAT one-stop shop.
Welcoming the agreement, EU taxation commissioner Pierre Moscovici said: ‘piece by piece, a new VAT system is being built that is fit for purpose and within which internet companies operating across borders can thrive’.
‘Today's agreement also bodes well for the more fundamental VAT reform in the EU that is so urgently needed’, he added.
The Commission has followed up its October communication on the ‘cornerstones’ for a new definitive single EU VAT area with a set of proposals for increased exchange of information and cooperation between national tax authorities and law enforcement bodies. These include:
a new online system for sharing information within the ‘Eurofisc’ network of member states’ fraud risk analysts and new powers for Eurofisc to coordinate cross-border investigations;
new lines of communication and data exchange between tax authorities and OLAF, Europol and the newly created European Public Prosecutor Office (EPPO);
sharing of information on imports from outside the EU and strengthened cooperation between tax and customs authorities in all member states; and
giving Eurofisc officials access to car registration data from other member states.
Exchange of information on business and cross-border sales between member states’ tax authorities currently relies heavily on the manual processing of information. There is no systematic sharing of VAT information and intelligence on organised gangs involved in the most serious VAT fraud with EU enforcement bodies.
These proposals take forward the Commission’s April 2016 VAT action plan and will now go forward to the EU Parliament for discussion.
