News from Accountancy Europe - May 2019

European Commission

Commission proposes tax exemption measures to facilitate common defense efforts

The European Commission has proposed to exempt supplies to armed forces from VAT and excise duties when these forces are deployed outside their own Member State and take part in a European defense effort under the Common Security and Defense Policy (CSDP).

Supplies to armed forces participating in a NATO defense effort can already benefit from such exemptions. The new Commission proposal should therefore ensure equal treatment of defense efforts under the NATO and the EU framework when it comes to VAT and excise duties.

As always with tax proposals, EU Member States will have to adopt the proposal by unanimity. The European Parliament, in turn, will only submit its non-binding opinion.

 

Link: https://ec.europa.eu/taxation_customs/sites/taxation/files/24_04_2019_proposal_vat_excise_common_eu_defence_en.pdf

 

Commission publishes new studies on VAT refunds across Europe - 10 May 2019 

The Commission has published two new studies on the functioning on the EU’s VAT refund system.

The first study focuses on the conformity of national legislations both with the Directive for cross-border intra-EU refunds and with Court of Justice of EU (CJEU) case law related to domestic refunds.

The second study, , analyses the level of implementation of the law and tries to identify and quantify the consequences of such implementation. In doing so, it highlights challenges that taxpayers, VAT refund agents and tax administrations face with the system of claiming VAT refunds both in the Member State of establishment and in another Member State.

 

International

UK Sets Out VAT Reform Initiatives - 5 April 2019

The UK government is about to release a whole policy package on VAT reforms, UK’s Chancellor Philip Hammond announced.

As a first step, the government plans to publish a policy paper in the next few months presenting potential reform of VAT refund rules, efforts to reduce administrative burdens and improvements to public sector productivity.

The government will also launch a call for evidence on simplification and improvement of the VAT Partial Exemption regime, to ensure simplicity and efficiency for taxpayers. And finally, to address the Paradise Paper revelations, the government will release its findings and recommendations following a review of VAT administration in the Isle of Man.

 

France calls for an EU approach to tax cryptocurrencies - 15 April 2019

French Finance Minister Bruno Le Maire calls for the EU to adopt a single regulatory framework for crypto-assets, based on new French legislation.

France is the first major country to adopt a legal framework for cryptocurrency. It allows firms that want to issue new cryptocurrencies or trade existing ones to apply for a certification. The certification will be granted by the French market regulator, and investors and issuers will have to pay taxes on profits they make on those securities. The certification will also give basic guarantees against fraud, money laundering, but no protection is granted against losses.

The European Commission has already launched a study on how to regulate cryptocurrency markets, but no legislation is expected until late 2019 and the arrival of the new Commission at the earliest.

 

Council

Romanian Presidency hopes to find agreement on VAT scheme for SMEs by June - 6 May 2019

The Romanian Presidency of the Council is striving to reach an agreement at the June ECOFIN meeting on the Commission proposal on VAT simplifications for SMEs.

The Presidency had initially hoped that an agreement would already be possible at the 17 May ECOFIN, but this is now looking unlikely due to reservations from at least Germany, the Netherlands, Ireland and the UK. 

The thresholds appear to be the main source of disagreement between. For example, the Commission proposed an EUR 85,000 EU-wide threshold up to which supplies of goods and services by SMEs in their home country may be exempt from VAT. Some Member States find this threshold to be too low, whilst for others it is too high. 

Member States also disagree on the transposition deadline, which the Commission initially set at 1 July 2022. The Romanian Presidency proposes instead to postpone the date of application to 1 January 2024, but some countries would like to extend the deadline further until 1 January 2025, and one Member State even until 1 January 2026.

The proposals would bring significant administrative alleviations for SMEs and might help boost the sector.

 

Court of Justice of the EU – Rulings

C-265/18: VAT and SMEs ruling 2 May - 2019

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELLAR:c3a7237b-6cbd-11e9-9f05-01aa75ed71a1

C‑133/18: VAT - 2 May 2019

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELLAR:c462843c-6cbd-11e9-9f05-01aa75ed71a1

 

C‑712/17: VAT liability of an invoice issuer - 8 May 2019

https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:62017CJ0712&from=EN

9. Setting up agents’ accounts for MTD – UK

 

A number of members have indicated that they are having problems setting up agents’ accounts to be able to file UK VAT returns via the new MTD process. Ruth Corkin is in contact with HMRC on this so please could you let Ruth, (Ruth.Corkin@hhllp.co.uk) copy Alexandra Stoicheva (info@VATassociation.org) if you are having problems around in particular dealing with the questions that refer to AML regulations. The issues found are:

 

  • HMRC refusing to accept that a member may not be subject to AML regulation (even when evidence produced to show that this is the case) – Ireland;
  • Refusal to accept an AML body regulation and refusing to provide guidance as to what evidence is required - Germany

 

Can you please provide details of your country’s AML bodies and whether there are exemptions in your country?

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News from the Board

IVA Meeting with the Portuguese Tax Authorities

The International VAT Association (IVA), represented by its President, Stephen Dale, and Board Member, Fátima Gouveia, met with the representatives of the Portuguese Secretary of State for Tax Affairs and of the Portuguese VAT Authority on the 9th of July 2019, in Lisbon. The IVA thanked the authorities for meeting with us at short notice.

Download the full Communique soon available.

News from IVA members

Mexico proposes the implementation of VAT on e-commerce supplies

The Mexican senate is proposing to levy VAT at 16%, on digital e-commerce supplies provided to consumers by non-resident online platforms...

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News from EC

News from EU - August 2019

Cross-border rulings (pilot project) – Update July 2019

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Disclaimer:  The information contained in the present page is general and does not constitute legal advice. Before taking any decision or action on the above information you should take the appropriate professional advice.