On June 26, 2018 the Dutch Minister of Finance sent a summary of discussions of the EUROGROUP meeting of June 21, 2018 and the Economic and Financial Affairs (ECOFIN) Council of June 22, 2018 to the Dutch House of Representatives. This summary of discussions give an interesting insight in some of the discussions that were held. In this article we will focus on the summary of discussions of the VAT topics that were discussed during the ECOFIN Council of June 22, 2018.
The proposal for quick fixes to improve the day-to-day functioning of the current VAT system
In his summary of discussions the Dutch Minister states that the Bulgarian Presidency was seeking to come to an agreement during the June ECOFIN Council on the proposal for quick fixes to improve the day-to-day functioning of the current VAT system (which will apply until the definitive regime will have been fully agreed and implemented). The proposal contains the following components:
· Simplification of VAT rules for companies moving goods from one Member State to another Member State where they are to be stored before being supplied to a customer known in advance. The described situation is referred to as "call-off stock arrangements";
· Simplification provided for chain transaction situations identifying the supply with which the intra-Community transport of goods should be linked;
· Simplification of the proof of transport of goods between two Member States needed for the application of the exemption to intra-Community supplies;
· Clarification that, in addition to the proof of transport, the VAT number of the commercial partners recorded in the electronic EU VAT-number verification system (VIES) is required in order to apply the cross-border VAT exemption under the current rules.
The Dutch Minister furthermore states that recently a fifth quick fix was added to the text during the discussion of the proposal in the working group, namely:
· An umbrella exemption to repair the judgments of the Court of Justice where the scope of the existing umbrella exemption was restricted to activities of general interest.
In his summary of discussions the Dutch Minister states that the Bulgarian Presidency attemted to get the ECOFIN Council to agree on the proposal with only the four original quick fixes in it. The Commission opposed the addition of the fifth quick fix due to possible disruption of the internal market, freedom of establishment and infringement of the Commission's right of initiative. Some Member States supported the presidency in its attempt to come an agreement on the four quick fixes. A few Member States pled for the proposal to be moved to a next ECOFIN Council and in the meantime to work on a solution to the problems regarding the fifth quick fix. An alternative solution whereby the proposal would be adopted on the basis of the four quick fixes if the Commission could promise to come up with a proposal did not make it because the Commission was not prepared to do so. The Minister expects that the discussion is expected to return to the ECOFIN Council in October 2018.
Administrative cooperation in the area of VAT
In our article of June 23, 2018 we already informed our readers that the ECOFIN Council reached a political agreement on the text for a COUNCIL REGULATION amending Regulation (EU) No 904/2010 and Regulation (EU) 2017/2454 as regards measures to strengthen administrative cooperation in the field of value added tax. As we reported in our article from May 30, 2018 we already informed our readers that at the ECOFIN Council of May 25, 2018 upon request of 1 Member State it was decided to move the matter to the June ECOFIN Council. The Dutch Minister now unveils that tha Member State was France.
Click here download the summary of discussions of the EUROGROUP meeting of June 21, 2018 and the Economic and Financial Affairs (ECOFIN) Council of June 22, 2018 as available on the website of the Dutch Ministry of Finance.
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