Pillar 2 Directive and new VAT rules to combat fraud in the e-commerce sector enter into force
European Commission
New transparency rules to combat VAT fraud come into force
The new rules will provide tax administration of EU Member States with payment information for them to detect VAT fraud more easily, with a focus on e-commerce.
The new system harnesses the role of payment service providers (PSPs) such as banks, e-money institutions, payment institutions and post office giro services. These handle over 90% of online EU purchases.
As of 1 January, PSPs will have to monitor the payees of cross-border payments and, as of 1 April, transmit information on those who receive more than 25 cross-border payments per quarter to the administrations of EU Member States. This information will then be centralised in the new Central Electronic System of Payment information (CESOP). Read more
European Parliament
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.
Council
Belgian Presidency programme: tax priorities
-
prioritise VAT in the digital age (ViDA) proposal
-
possible political agreement on ViDA at the 14th May ECOFIN
Progress report on work so far and way forward on VAT in the digital age
International
EESC publishes positions on FASTER, HOT and VAT rules
The European Economic and Social Committee (EESC), consisting of representatives from Europe’s social partners in the industry and trade unions, has issued its opinions on several EU tax files.
See here for the opinion on HOT, here for FASTER and here for VAT rules relating to taxable persons who facilitate distance sales of imported goods. EESC’s opinions are non-binding, but reflect the views of the social partners and are the result of interactions with relevant experts.
Denmark introduces green tax on air passengers from 2025
Denmark agreed on 15 December to impose a tax on air passengers to help finance the airline industry’s transition to greener practices, which will be gradually phased in from 2025, the government said.
The government in November proposed imposing an average tax of 100 Danish crowns ($14.35) on air travel to help finance the industry’s green transition, which aims to enable all domestic flights to use 100% sustainable fuels by 2030.
