European Commission proposes new rules on VAT in the digital age and exchange of tax info
European Commission (EC) published on 8 December two long-awaited proposals: to include crypto-assets and e-money in the scope of the Directive on administrative cooperation (DAC 8) and update VAT rules for the realities of the digitalised economy.
On DAC 8, the proposal puts forward changes to existing provisions on exchanges of information and administrative cooperation. It extends the Directive’s scope to the automatic exchange of information documented by reporting crypto-asset service providers. The rules on due diligence procedures, reporting requirements and other rules applicable to reporting crypto-asset service providers are based on the OECD crypto-asset reporting framework.
The proposal extends the exchange of advanced cross-border rulings and advanced pricing agreements to high-net-worth individuals who hold a minimum of EUR 1 000 000 in financial or investable wealth or assets under management, excluding that individual’s main private residence.
Finally, the proposal introduces more specific penalties for breaches of the DAC rules in Article 25a.
The VAT in the digital age proposal introduces at least three key changes:
- A move to real-time digital reporting based on e-invoicing for businesses that operate cross-border in the EU and a harmonised framework for domestic transactions
- Updated VAT rules for passenger transport and short-term accommodation platforms. Under the new rules, platform economy operators themselves will be deemed responsible for collecting VAT when service providers do not and for remitting this VAT to tax authorities
- The introduction of a single VAT registration across the EU
All of the proposals will need to be unanimously adopted by the Council of the EU.
EU to revive digital levy plan if global tax deal fails, Czech minister warns
The EU will resurrect talks on a digital services levy if a global deal on the taxation of corporate giants fails, a senior European policymaker has warned.
Zbyněk Stanjura, the finance minister of the Czech Republic, which holds the rotating EU presidency, said several member states fear the US will not implement the global agreement agreed upon last year. This would force the world’s 100 biggest multinationals to declare profits and pay more tax in their business countries.
In such an eventuality, EU governments would return to shelved discussions to implement a digital services tax, Stanjura predicted. He argued that any such levy should be at a bloc-wide level.
The IVA wishes you Happy Holidays and a wonderful 2023 New Year!