The EU Parliament’s committee on economic and monetary affairs has put forward draft amendments to the Commission’s package of proposed VAT directive changes, aimed at improving operation of the VAT system in the context of the digital economy.
In December 2016, the European Commission followed up its April 2016 VAT action plan with a set of proposals, which included:
extending the existing mini one-stop-shop (MOSS) into a new one-stop-shop (OSS), to cover online supplies of goods as well as services, and to include imports;
holding online platforms liable for collection of VAT on supplies of services;
introducing an annual threshold of €10,000 up to which micro-businesses can continue to apply their domestic VAT rules, and a threshold of €100,000 for SMEs to use simpler rules for invoicing and record keeping; and
removing small consignments relief and the intra-EU distance sales regime;
The committee’s draft report puts forward amendments to the Commission’s proposals, which would:
hold platforms liable for collection of VAT when acting as intermediaries for supplies of goods imported from non-EU countries, where the goods have a value under €150 and the business has a turnover of more than €1 million;
reduce to five years the period for which businesses should keep records of transactions covered by the new OSS (from the Commission’s proposed 10 years); and
extend by three months, until 1 April 2021, the deadline for businesses to register with the new OSS.
The Commission’s December package also proposed align the VAT treatment of e-books with printed books by allowing member states to apply reduced or zero rates to e-publications. The committee on economic and monetary affairs voted at the beginning of May to approve this proposal.
Central to the reforms contained in the Commission’s April 2016 VAT action plan is the move from an origin-based system, which taxes goods and services where the supplier is based, to one where VAT becomes payable in the member state of the final consumer. To help ease the administrative burden for businesses, the EU introduced the mini one-stop-shop (MOSS) in 2015 for cross-border sales of telecommunications services, allowing traders to account for VAT on all such supplies in a single online return.
The EU Parliament’s committee on economic and monetary affairs has put forward draft amendments to the Commission’s package of proposed VAT directive changes, aimed at improving operation of the VAT system in the context of the digital economy.
In December 2016, the European Commission followed up its April 2016 VAT action plan with a set of proposals, which included:
extending the existing mini one-stop-shop (MOSS) into a new one-stop-shop (OSS), to cover online supplies of goods as well as services, and to include imports;
holding online platforms liable for collection of VAT on supplies of services;
introducing an annual threshold of €10,000 up to which micro-businesses can continue to apply their domestic VAT rules, and a threshold of €100,000 for SMEs to use simpler rules for invoicing and record keeping; and
removing small consignments relief and the intra-EU distance sales regime;
The committee’s draft report puts forward amendments to the Commission’s proposals, which would:
hold platforms liable for collection of VAT when acting as intermediaries for supplies of goods imported from non-EU countries, where the goods have a value under €150 and the business has a turnover of more than €1 million;
reduce to five years the period for which businesses should keep records of transactions covered by the new OSS (from the Commission’s proposed 10 years); and
extend by three months, until 1 April 2021, the deadline for businesses to register with the new OSS.
The Commission’s December package also proposed align the VAT treatment of e-books with printed books by allowing member states to apply reduced or zero rates to e-publications. The committee on economic and monetary affairs voted at the beginning of May to approve this proposal.
Central to the reforms contained in the Commission’s April 2016 VAT action plan is the move from an origin-based system, which taxes goods and services where the supplier is based, to one where VAT becomes payable in the member state of the final consumer. To help ease the administrative burden for businesses, the EU introduced the mini one-stop-shop (MOSS) in 2015 for cross-border sales of telecommunications services, allowing traders to account for VAT on all such supplies in a single online return.
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