There were several VAT topics on the agenda for the May 25, 2018 meeting of the Economic and Financial Affairs (ECOFIN) Council.
On the website of the Council an “OUTCOME OF THE COUNCIL MEETING 3619th Council meeting Economic and Financial Affairs” is published. In this outcome the following is noted with respect to each of these VAT topics:
VAT Administrative Cooperation
The Council discussed measures aimed at strengthening administrative cooperation in order to better prevent VAT fraud.
Despite progress made on the proposal, it was unable to reach an agreement at this stage.
The proposed regulation sets out to:
- improve the exchange and analysis of information shared by the member states’ tax administrations and with law enforcement bodies;
- strengthen Eurofisc, a network of national tax officials for the exchange of information on VAT fraud;
It also introduces new instruments for cooperation such as administrative enquiries carried out jointly
Amending regulation 904/2010, the proposal is aimed at containing fraud in the short term, pending implementation of a definitive VAT system.
The Council needs unanimity to adopt the regulation, after consulting the European Parliament. (Legal basis: article 113 of the Treaty on the Functioning of the European Union.) The Parliament hasn’t yet delivered its opinion.
VAT Fraud – 'Reverse charge' Mechanism
The Council discussed a proposal that would allow member states to apply temporarily a generalised reversal of VAT liability in order to better prevent VAT fraud.
It was unable to reach an agreement at this stage.
The so-called ‘reverse charge’ mechanism involves shifting liability for VAT payments from the supplier to the customer. The proposal was issued at the request of member states particularly affected by VAT fraud.
The directive would offer a short-term solution for containing fraud, pending implementation of a new VAT system where supplies will be taxed in the country of destination. It would apply to all domestic supplies of goods and services above an invoice threshold of €10 000.
The Council needs unanimity to adopt the directive, after consulting the European Parliament. (Legal basis: article 113 of the Treaty on the Functioning of the European Union.) The Parliament hasn’t yet delivered its opinion.
VAT rates for electronic publications
The Council discussed a proposal that would allow member states to apply reduced VAT rates to electronic publications
It was unable to reach an agreement at this stage.
The proposed directive is aimed at aligning VAT rules for electronic and physical publications, thereby contributing to the EU’s ‘digital single market’ plan.
It would apply temporarily, pending the introduction of a new, ‘definitive’ VAT system.
The Council needs unanimity to adopt the directive, after consulting the European Parliament. (Legal basis: article 113 of the Treaty on the Functioning of the European Union.) The Parliament delivered its opinion on 1 June 2017.
Copyright – internationaltaxplaza.info
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