Accountancy Europe and DG TAXUD urge accountants to help SMEs with VAT e-commerce rules
Accountancy Europe has published a new paper, based on advice from EC’s DG TAXUD, on the new VAT e-commerce rules that will enter into force in the EU from 1 July 2021. It is aimed especially for SME accountants.
The paper outlines the main upcoming changes, and describes how SMEs’ obligations under various e-commerce scenarios in the EU Single Market will change. It urges SMEs’ accountants to take action to inform their SME clients about these changes, and help them adapt their businesses accordingly.
EP ‘fast tracks’ EC’s COVID VAT exemptions proposals
EP’s Plenary approved the EC’s proposed extended VAT waver for importations of supplies needed in the fight against the COVID pandemic on 18 May. Given the urgency of the topic, EP had decided to ‘fast track’ the file and adopt it without rounds of amendments and negotiations.
FISC hearing on role of technology in the tax system
FISC Committee hosted a public hearing on “How can technology help in reducing fraud and making tax compliance simpler” on 25 May. The discussion came in a context of increased calls at an international level to clamp down on tax fraud and to reduce administrative burdens on taxpayers through technological advances.
FISC Subcommittee members heard the expert views of Vincent Drezet and Peter Green (Forum on Tax Administration, OECD) on the potential of technology to both facilitate taxpayer compliance and to fight against tax fraud and evasion. EC representatives from DG TAXUD also shared insights on how to better strengthen digital governance, and discussed the practical implementation of such measures for national tax administrations and the potential of data.
ECON Committee adopts draft report on tax information exchange
The draft report was prepared by MEP Sven Giegold (Greens-EFA/Germany). It aims to assess and monitor the functioning of the EU’s Directive for administrative cooperation on taxation (DAC).
Giegold makes several concerning observations, including that the exchanged data appears to be of poor quality, not frequent and does not cover certain types of income and assets. He also deplores that EU Member States were reluctant to provide their DAC related data for the investigation, with the exception of Finland and Sweden.
Following a 27 May vote in ECON Committee, a final vote in Plenary is scheduled for 23 June.
EU finance ministers express support for revision of energy taxation rules
EU finance ministers discussed the EC’s planned revision of the Energy Taxation Directive (ETD), currently scheduled for 14 July, on 22 May.
According to EC Vice-President Dombrovskis, who was present at the meeting, all Member States agreed that green taxation can encourage a sustainable use of resources, produce economic, social and health benefits, broaden the tax base and foster the shift away from taxing labour. The Portuguese Presidency said there is “broad support” for including maritime and aviation sectors into the scope of ETD.
Member States will need to approve any proposed ETD revision with unanimity.
US raises concerns over Europe’s planned carbon ‘border tax’
Implementing a border levy to price carbon-intensive imports and protect European industries will be “extremely complicated,” warned Jonathan Pershing, US climate envoy’s team member. He added: “I don’t disagree in principle that it has value, but I think that it’s got enormous complexity”.
The carbon border adjustment mechanism, due to be revealed on 14 July, aims to put a price on imports from countries where it is cheaper to pollute, to protect European manufacturers facing higher carbon costs.
New EU VAT rules to cost British SMEs £180m in extra red tape
UK e-commerce sellers are facing £180m in additional red tape costs as the EU imposes sweeping VAT reforms on e-commerce sales from outside the bloc, according to a consultancy.
The new rules, which will be introduced on 1 July, were originally designed to stop an estimated EUR 7 billion in annual VAT fraud by non-EU e-commerce sellers, many of which are located in China. After the UK’s departure from the EU, British companies will also need to comply.
SMEs exporting to EU customers are set to face the biggest upheaval because of the changes, which remove VAT exemptions for SMEs and shipments not exceeding EUR 22.