The European Commission has replied to a question asked by the MEP Claude Rolin (EPP/BEL) with regard to obesity taxes. In his question, Mr. Rolin asks the Commission whether it will use taxation as a tool to tackle obesity and …
Tax and tackling obesity – 15 April 2016
The European Commission has replied to a question asked by the MEP Claude Rolin (EPP/BEL) with regard to obesity taxes. In his question, Mr. Rolin asks the Commission whether it will use taxation as a tool to tackle obesity and improve nutrition in the EU, and in particular a special VAT rate for healthy foods, including a zero rate for fruit, vegetables and water. In his reply, Commissioner Moscovici refers to an earlier reply to a similar question provided by Commissioner Andriukaitis (health and food safety), in which he lists a number of EU programmes and initiatives aiming to promote healthier lifestyles in the EU. He however emphasises that taxation is one tool out of many possible ones to address consumption habits, and that Member States already have the option of applying a lower tax rate on fresh fruit and vegetables. He moreover confirms that the Commission’s VAT Action Plan will give Member States greater flexibility in the application of VAT rates.
European Parliament ECON Committee publishes report on achieving a definitive VAT system and combating VAT fraud – 27 April 2016
The MEP Werner Langen (EPP/GER) has submitted a draft own-initiative report on the definitive VAT regime and combatting VAT fraud for the consideration of the ECON Committee. The report is legally non-binding and commits neither the Commission nor the Council to action. The main elements of interest from the report include the following:
- Welcomes in broad terms the Commission VAT Action Plan, published in early-April, but calls for more “fundamental reform” and a more coordinated tax policy between Member States;
- Endorses the destination-principle proposed by the European Commission;
- Argues that differences in VAT rates pose uncertainties for companies involved in cross-border activities, and maintains that reduced rates are ineffective in achieving the intended social goals:
o Calls consequently for a single list of reduced goods and services, allowing for fewer exemptions than currently – these should be decided at the EU-level;
- Calls for products to be subject to the destination principle regardless of in what form or through which platforms they have been purchased, and regardless of the means of delivery;
- Calls on the Member States to apply the same VAT on public and private companies;
- Expresses enthusiasm towards the general reverse charge mechanism – extend reverse charging to all B2B transactions:
o Calls on the Commission to conduct pilot projects to assess its effects;
o Less distortion to competition;
o Reverse charge mechanism would reduce fraud, simplify accounting.
In terms of next steps, the deadline for amendments is 31 May. The vote in the ECON Committee is scheduled for 13 July, whilst a plenary vote is expected for 5 September.
Commission refers Germany to Court for failing to amend VAT rules for travel agents – 28 April 2016
The European Commission will refer Germany to the Court of Justice of the EU (CJEU) due to its failure to “properly apply” the special VAT scheme for travel agents in accordance with the relevant provisions of the VAT Directive. CJEU jurisprudence stipulates that the scheme should apply to travel agents dealing with all types of clients, including businesses. The German provision currently limits the scheme to travel services provided to private users.
EU VAT system – 29 April 2016
The European Commission has replied to a question asked by the MEP Brian Hayes (EPP/IRL) with regard to the EU VAT system. In his question, Mr. Hayes refers to different VAT thresholds and the problems that these cause for smaller businesses. He therefore asks the Commission whether the Mini One-Stop Shop (MOSS) has been successful in simplifying the VAT system for SMEs. In his reply, Commissioner Moscovici lists a number of initiatives for 2016, in particular modernising VAT for cross-border e-commerce, including the extension of MOSS to cross-border supplies of tangible goods, the removal of the exemption for the importation of small consignments, the application of home country rules including invoice requirements and audits, and the introduction of a VAT exemption threshold for start-up companies for their EU sales. In 2017 moreover, the Commission will submit a proposal to amend the VAT Directive’s provisions on the SME scheme.