Explanatory Memorandum to COM(2010)381 - Amendment of Directive 2008/9/EC laying down detailed rules for the refund of VAT, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2010)381 - Amendment of Directive 2008/9/EC laying down detailed rules for the refund of VAT, provided for in Directive 2006/112/EC, to ... |
|---|---|
| source | COM(2010)381  |
| date | 15-07-2010 |
Grounds for and objectives of the proposal
Council Directive 2008/9/EC (the Refund Directive) allows for non-established taxable persons to reclaim VAT on business expenses incurred in another Member State (the Member State of refund) via an electronic web portal set up in their own Member State (the Member State of establishment). This electronic system replaced the old paper based system and simplifies the process for businesses, and provides greater legal certainty via the imposition of strict deadlines together with interest on late payments by the Member State of refund. The refund applications should be submitted to the Member State of establishment no later than 30 September of the calendar year following the refund period.
Following a number of problems incurred in the practical application of the procedure at the level of several Member States, it is proposed to amend the Refund Directive in order to give taxable persons more time to submit applications relating to refund periods in 2009. Therefore, exceptionally, the deadline of 30 September 2010 for the submission of applications relating to refund periods in 2009 should be extended to 31 March 2011. This is without prejudice to the Commission taking other actions in order to ensure the correct application of European Union law.
Further to the abovementioned problems, it is also proposed to provide scope for certain implementing measures to be adopted according to the procedure provided for under Council Regulation No (EC) 1798/2003 on administrative cooperation in the field of value added tax. This would allow the Member States and the Commission to agree on the necessary technical aspects of application of the Directive, and hence improve the running of the system.
General context
Article 15 of the Refund Directive states that applications should be submitted to the Member State of establishment at the latest on 30 September of the calendar year following the refund period. As the Directive came into force on 1 January 2010, any applications concerning 2009 are to be submitted to the Member State of establishment by 30 September 2010 at the latest.
While the EU systems for the exchange of information between Member States have been ready on time, problems have occurred at the level of certain individual Member States' portals. Some Member States opened their web portals very late (up to the middle of May 2010) and there have been various technical problems with the operability and access to certain portals.
This lack of availability of the web portals in due time seriously restricts the fundamental right of deduction of the taxable person, and it is for this reason that the Commission is proposing to extend the deadline for applications relating to 2009 in order that taxable persons can properly exercise this right.
Member States have also had divergent views of how the system should operate from a technical point of view, which have only come to light once the system has been operational. Whilst the common IT elements are defined at the EU level, the technical requirements for the electronic communication with taxable persons are defined by each Member State. This has also contributed to a number of delays and problems in the submission and processing of applications. Therefore it is necessary to provide that the Commission can adopt the necessary implementing measures following the opinion of the Standing Committee on Administrative Co-operation. These areas specifically relate to the electronic application to the web portal; the attachments to applications; the means by which the Member State of establishment confirms receipt and transfer of the application; and the means by which the Member State of refund notifies the applicant it has received the application, or requests further information.
Existing provisions in the area of the proposal
Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State.
Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax and repealing Regulation (EEC) No 218/92.
Commission Regulation (EC) No 1174/2009 of 30 November 2009 laying down rules for the implementation of Articles 34a and 37 of Council Regulation (EC) No 1798/2003 as regards refunds of value added tax under Council Directive 2008/9/EC.
Contents
Consultation of interested parties
Informal consultation with businesses has been organised (meetings and conferences with business organisations) and has made it possible to collect feedback. Business representatives notably expressed their strong concerns with the deadline of 30 September 2010 for applications relating to 2009. No formal consultation of the proposed measure can be organised given the urgency of the measure.
Impact assessment
As this measure does not significantly amend the existing measure, no impact assessment is necessary.
Summary of the proposed action
The proposal will extend the deadline for submission of a refund application under Directive 2008/9/EC to 31 March 2011 exceptionally for applications concerning refund periods in 2009, and provide for certain implementing measures to be adopted under the procedure provided for in Council Regulation (EC) No 1798/2003.
The proposal has no negative impact on the EU budget.