Accountancy Europe published a document on the Modernising VAT
The document provides an overview of current EU initiatives in respect of VAT, for persons with a working knowledge of the European VAT system…
Accountancy Europe published a document on the Modernising VAT
The document provides an overview of current EU initiatives in respect of VAT, for persons with a working knowledge of the European VAT system.
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European Parliament
Green light for GRCM – Generalised Reverse Charge Mechanism
MEPs approved a draft report on GRCM prepared by the MEP Gabriel Mato (EPP/SPA). The vote passed with 24 votes in favour, seven votes against and 16 abstentions.
As a next step, the European Parliament Plenary will vote on the final opinion on 11 December. Once this is done, the Council agreement on GRCM reached in the October ECOFIN can become EU law. Although the European Parliament has no say on VAT files and can only submit its non-binding opinion, this opinion is needed in order for a proposal to be finally adopted.
Hearing with Commissioner Moscovici
Commissioner Moscovici also reminded that the Commission will publish in January-February 2019 a Communication suggesting a move to qualified majority voting in the Council on certain tax files. He called on the European Parliament to lend its political support and weight behind this reform.
Council
Other elements from the ECOFIN
Member states formally adopted the four VAT quick fixes. Although a political agreement had already been reached in October, the member states had to wait for the European Parliament to submit its non-binding opinion, which it did in the meanwhile.
Court of Justice of the EU Rulings
C‑664/16: evidence of the amount of input VAT paid – 21 November 2018
The Fourth Chamber of CJEU has ruled that a taxable person who is unable to provide evidence of the amount of input VAT he has paid, by producing invoices or any other document, cannot benefit from a right to deduct VAT solely on the basis of an assessment resulting from an expert report commissioned by a national court.
C‑648/16: use of extrapolation for calculating VAT – 21 November 2018
The Fourth Chamber of CJEU has ruled that the VAT Directive as well as the principles of fiscal neutrality and proportionality do not preclude national legislation which authorises tax authorities, in the event of serious differences between declared revenue and revenue estimated on the basis of sector studies, to use extrapolation, based on such sector studies, in order to determine the amount of turnover achieved by a taxable person and, consequently, to carry out a tax adjustment requiring the payment of additional VAT, provided that that legislation and its application enable the taxable person, in compliance with the principles of fiscal neutrality, proportionality and the right of defence, to challenge the results obtained by that method, on the basis of all of the evidence to the contrary available to him, and to exercise his right of deduction, which it is for the referring court to verify.
C‑264/17: input tax on works of art – 29 November 2018
The Fourth Chamber of CJEU has ruled that:
- A taxable dealer may opt for the application of the margin scheme to the input supply of works of art which were supplied in the context of an exempt intra-Community supply, by the creator or his successors in title, when those persons do not fall within the categories of persons listed in Article 314 of the VAT Directive
- A taxable dealer may not opt for the application of the margin scheme laid down in Article 316(1)(b) of the VAT Directive to an input supply of works of art that were supplied to him in the context of an exempt intra-Community supply and, at the same time, claim a right to deduct input VAT in the situations in which such a right is precluded under Article 322(b) of that Directive, if that latter provision has not been transposed into national law.
C‑548/17: taxation of professional football player agencies – 29 November 2018
The Sixth Chamber of the CJEU has ruled that the VAT Directive precludes the chargeable event and chargeability of a tax on the supply of agency services for professional football players by an agent paid in conditional instalments over several years further to the placement, from being regarded as occurring or taking effect when the player is placed.
International
UK publishes BREXIT NOTICES ON TAXATION – 30 November 2018
The British government has published draft public notices on taxation of cross-border trade in the aftermath of Brexit. The documents set out the realities, the conditions and tax rules applicable to transactions and compliance in the area of taxation in a post-Brexit environment, with the aim of helping taxable persons prepare for what is to come.
Other News
Accountancy Europe publishes VAT factsheet to provide a one-stop-shop of all pending major EU VAT initiatives – 5 December 2018
Accountancy Europe has published a VAT factsheet that provides an overview of all current EU VAT initiatives. These VAT proposals have different objectives. Some aim to improve the competitiveness of the Digital Single Market and others to increase the cross-border trading activities of smaller businesses. Some provisions address weaknesses or inequalities in the current VAT system. Finally, Definitive Regime proposals have been introduced after over a quarter of a century of discussions and negotiations to modernise the European VAT system and make it more effective in the fight against fraud.
The factsheet sets out the proposals according to themes and provides a summary of the current state of play, the changes agreed or proposed, and an indication of the potential impact of these changes on businesses affected.
The factsheet also indicates whether the proposals have been agreed or are still under negotiation. It is intended to update this document as and when new proposals are made, or existing proposals are agreed.
