Accountancy Europe publishes several factsheets on taxation and responds to HOT proposal
November has been a busy month for Accountancy Europe’s tax team! In the past weeks, we have published 3 factsheets that aim to inform accountants and stakeholders about new European Commission (EC) tax proposals, namely:
Factsheet on the Business in Europe: Framework for income taxation (BEFIT) proposal
Factsheet on the Head office tax system for SMEs (HOT) proposal, which we invite our SME accountant members in particular to look into
Factsheet on the transfer pricing proposal
Moreover, Accountancy Europe submitted on 17 November its formal response to the HOT proposal, with recommendations to make the provisions even better from SMEs’ perspective.
EU VAT gap report 2023
EC’s latest VAT gap report, published on 24 October, indicates that most EU Member States made progress in the enforcement of VAT compliance in 2021. The study shows that Member States lost around €61 billion in VAT in 2021, compared to €99 billion in 2020.
This figure represents revenues lost mainly to VAT fraud, evasion and avoidance, non-fraudulent bankruptcies, miscalculations and financial insolvencies, among other drivers.
The 2023 report shows that while some revenue losses are impossible to avoid, targeted policy responses seem to have made a difference, particularly those related to digitalisation of tax systems, real-time reporting of transactions and e-invoicing. At the same time, temporary factors such as government support measures implemented during the COVID-19 pandemic, which were often contingent on paying taxes, may also have played a role in driving this positive change.
European Parliament (EP)
Plenary adopts position on VAT in the Digital Age
EP adopted on 22 November at its Plenary session its position on the VAT in the Digital Age proposals (ViDA). The report on VAT rules for the digital age was adopted with 570 votes in favour, 17 votes against and 52 abstentions. In addition, the report on the VAT administrative cooperation arrangements needed for the digital age passed with 615 votes in favour, 10 votes against and 15 abstentions. Both EP opinions were prepared by MEP Olivier Chastel (RE/Belgium).
EP only provides its non-binding opinion, but this opinion is nonetheless needed for ViDA to eventually become EU law. As reported in previous Tax Policy Updates, the Belgian Council Presidency appears to aim for an agreement on ViDA during its mandate, which will end in June 2024.
Plenary adopts position on VAT rules on distance sales and special arrangements
On the same day 22 November, the Plenary also adopted in a single vote its report on the proposal on VAT rules relating to taxable persons who facilitate distance sales of imported goods and the application of the special scheme for distance sales of goods imported from third territories or third countries and special arrangements for declaration and payment of import VAT. The report, prepared by MEP Olivier Chastel (RE/Belgium), passed with 603 votes in favour, 23 votes against and 10 abstentions.
MEPs support simplified procedure for VAT special scheme
ECON Committee met on 24 October for a consideration of draft report and decision on procedure regarding the EC proposal on VAT rules for taxable persons who facilitate distance sales of imported goods and the application of the special scheme for distance sales of goods imported from third countries, and special arrangements for declaration and payment of import VAT.
The proposal aims to further adapt the EU VAT framework by expanding the range of supplies covered by the Import One Stop Shop (IOSS), Special Arrangements and deemed supplier regime by removing the EUR 150 threshold, which currently limits their application and effectiveness. Therefore, the IOSS could be used to declare and remit the VAT due on all distance sales of imported goods into the EU, irrespective of their value, but not including products subject to excise duties, which remain excluded from the scheme. This proposal also aims to reduce compliance costs for businesses and create a level playing field for sellers operating online.
At the meeting, every MEP who spoke agreed to move forward with a streamlined process for this file, no amendments.
Conference “Court of Justice of the European Union: Recent VAT Case Law”
The conference is organized by the Institute for Austrian and International Tax Law, which will take place on January 24-26, 2024, at WU (Vienna University of Economics and Business).
The conference will focus on the recent case law of the CJEU in the area of VAT. The most relevant judgments rendered in 2023 will be analysed by panels consisting of leading academics, judges, government representatives and business representatives. In addition, we will discuss the reform plans to transfer the jurisdiction for preliminary rulings in VAT from the CJEU to the General Court in an introductory session.
For the registration link as well as more detailed information on the conference please visit: https://www.wu.ac.at/taxlaw/events/vat-2024/