Market leading insight for tax experts
View online issue

EU VAT action plan ‘not decisive breakthrough’

printer Mail

The European Parliament’s Committee on Economic and Monetary Affairs has published a draft report critical of the European Commission’s VAT action plan in a number of respects (see The report describes as ‘incomprehensible’ the Commission’s reluctance to propose a comprehensive reverse charging procedure. It concludes that the initiatives and timetable proposed ‘certainly do not represent a decisive breakthrough’ in reforming a VAT system regarded as transitional since 1993; and that, instead of comprehensive reform, the Commission has opted for ‘agenda setting’.

The report contains a ‘motion for a European Parliament resolution on ways of achieving a definitive VAT system and combating VAT fraud’. This supports aspects of the Commission’s VAT action plan issued on 7 April; in particular, its proposals for a definitive VAT system by 2017, additional measures against fraud, establishment of a single European VAT area, and the SME package.

However, the Committee’s motion ‘objects to the narrowing down of the proposed improvements to parts of the existing system’. Key elements of the motion include the application of a general reverse charge procedure; and a single list of reduced-rate goods and services to be determined jointly at EU level. The motion also calls for a treaty change ‘so that the ordinary legislative procedure, with co-decision by Parliament and the Council, can be introduced in the context of the VAT Directive’.

Separately, the Commission has published a list of withdrawn proposals in the EU Official Journal (see These include:

·       standard EU VAT return, first proposed in 2013;

·       common system of financial transaction tax, first proposed in 2011; and

·       common system of VAT treatment for insurance and financial services, first proposed in 2007.

Issue: 1308
Categories: News