Considerations on COM(2018)329 - Amendment of Directive 2006/112/EC as regards the detailed technical measures for the operation of the definitive VAT system for the taxation of trade between Member States - Main contents
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| dossier | COM(2018)329 - Amendment of Directive 2006/112/EC as regards the detailed technical measures for the operation of the definitive VAT system ... |
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| document | COM(2018)329  |
| date | May 25, 2018 |
(2) The Council, supported by the European Parliament6 and the Economic and Social Committee7, confirmed that an origin-based system was not achievable and invited the
OJ C , , p. . OJ C , , p. .
First Council Directive 67/227/EEC of 11 April 1967 on the harmonisation of legislation of Member States concerning turnover taxes (OJ 71, 14.4.1967, p. 1301).
Second Council Directive 67/228/EEC of 11 April 1967 on the harmonisation of legislation of Member States concerning turnover taxes — Structure and procedures for application of the common system of value added tax (OJ 71, 14.4.1967, p. 1303).
Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ L 347, 11.12.2006, p. 1).
European Parliament resolution of 13 October 2011 on the future of VAT (P7_TA(2011)0436) www.europarl.europa.eu/sides">www.europarl.europa.eu/sides
European Economic and Social Committee Opinion of 14 July 2011 on the ‘Green Paper on the future of VAT - Towards a simpler, more robust and efficient VAT system’ eur-lex.europa.eu/legal-
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Commission to proceed with in-depth technical work and a broadly based dialogue with Member States to examine in detail the different possible ways to implement the destination principle8.
(3) The Commission, in its VAT Action Plan9, sets out the amendments to the VAT
system that would be necessary in order to develop such a destination-based system
for intra-Union trade by means of the taxation of cross-border supplies. The Council
subsequently reaffirmed the conclusions of that Action Plan and stated, inter alia, that
in its view the principle of taxation at origin as envisaged for the definitive VAT
system should be replaced by the principle of taxation in the Member State of destination10.
(4) In order to achieve the objectives set out in the Commission’s VAT Action Plan, the rules for intra-Union Business-to-Business (B2B) supplies of goods should be amended, in compliance with the staggered approach proposed by the Commission in its Communication of 4 October 2017 on the follow-up to the VAT Action Plan11.
(5) With a view to providing a more effective system for the taxation of intra-Union B2B supplies of goods in the Member State of destination, it is necessary to abolish the current system whereby supplies in the Member State of departure of the goods are exempt and intra-Community acquisitions are taxed in the Member State of destination. Since the exemption for such supplies and the concept of intra-Community acquisition itself as a transaction subject to VAT are to be abolished, all related articles should be amended or deleted.
(6) In order to ensure an equal treatment between domestic transactions and intra-Union transactions, the taxation for VAT purposes of intra-Union B2B transactions in goods should be premised on a single taxable event, namely an intra-Union supply of goods.
(7) In view of ensuring that the principle of taxation at destination is applied as widely as possible, the definition of an intra-Union supply of goods should include, without any restriction by way of a threshold, a supply to a non-taxable legal person, a supply to an exempt taxable person, a supply to a taxable person under the special scheme for small enterprises and a supply to a farmer under the flat-rate scheme.
(8) The concepts of intra-Union distance sales of goods and of distance sales of goods imported from third territories or third countries should be amended in order to avoid the situation whereby certain of these supplies would be covered by the new definition of intra-Union supply.
(9) With a view of ensuring the smooth functioning of the VAT system within the internal market, certain supplies of goods need to be excluded from the definition of intra-Union supplies, in particular supplies of goods with assembly or installation; supplies of goods for the fuelling and provisioning of certain vessels and aircrafts; supplies of goods in the framework of diplomatic and consular arrangements and for certain
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Council conclusions on the future of VAT - 3167th Economic and Financial affairs Council meeting,
Brussels, 15 May 2012 (see in particular point B 4)
www.consilium.europa.eu/uedocs/cms_data/docs">www.consilium.europa.eu/uedocs/cms_data/docs
Action Plan on VAT – Towards a single EU VAT area - Time to decide (COM(2016) 148final of
7.4.2016.
See: www.consilium.europa.eu/en/press/press-releases">www.consilium.europa.eu/en/press/press-releases
Communication from the Commission to the European Parliament, the Council and the European
Economic and Social Committee on the follow-up to the Action Plan on VAT – Towards a single EU
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international organisations, and supplies of goods made by a taxable person covered by the common flat-rate scheme for farmers.
(10) In order to ensure taxation at destination for B2B intra-Union supplies of goods, the place of supply of an intra-Union supply of goods should be situated in the Member State of arrival of the goods at the time when dispatch or transport of the goods to the customer ends. That rule should not apply to supplies of second-hand goods, works of art, collectors' items or antiques subject to the margin scheme, nor should it apply to supplies of goods on board ships, aircraft and trains and to supplies of goods through a natural gas system, of electricity, and of heat or cooling energy through heating and cooling networks which should remain covered by specific rules on the place of supply.
(11) As a result of the abolition of the intra-Community acquisition as a taxable event for the purposes of VAT, the current special rules in relation to the supply of new means of transport and of excise products need to be reviewed.
(12) In order to harmonise the application of this definitive system across the Union, it is necessary to determine a single rule for the chargeability of VAT on intra-Union supplies of goods.
(13) The overall rule for supplies of goods, including intra-Union supplies of goods, and for supplies of services should be that the supplier is liable for the payment of the VAT.
(14) In order to allow for a gradual transition to the definitive system for intra-Union trade, an exception to the rule that the supplier is liable for the payment of VAT should be made in case of a supply of goods, insofar as the person to whom the goods are supplied is a certified taxable person and the supplier is not established in the Member State of taxation. In that case, the acquirer should be the person liable for the payment of VAT and he should account for the VAT by means of the reverse charge mechanism. This exception should reduce the volume of transactions for which the person liable for the payment of VAT is not established in the Member State of taxation.
(15) The rules on the temporary application of the reverse charge mechanism for movable goods should be reviewed in order to ensure their coherence with the introduction of the new rules regarding the person liable for the payment of VAT on intra-Union supplies of goods.
(16) With a view to a straightforward application of the rules on taxation of intra-Union supplies of goods by businesses, Member States should take the necessary measures to ensure that every taxable person and non-taxable legal person who is the recipient of intra-Union supplies of goods is identified by way of an individual number.
(17) To ensure the proper monitoring of the payment and deduction of VAT related to intra-Union supplies of goods, the issuing of an invoice should be mandatory for intra-Union supplies of goods and Member States should not allow the issuing of simplified invoices. The invoice should be issued in accordance with the rules of the Member State in which the supplier has established his business or has a fixed establishment from which the supply is made or, in the absence of such place of establishment or fixed establishment, the Member State where the supplier has his permanent address or usually resides.
(18) With a view to reducing the administrative burden on trade within the Union, and since VAT on intra-Union supplies of goods would either effectively be charged by
the supplier or accounted for by an acquirer that is a certified taxable person, the obligation to submit a recapitulative statement for these supplies should be abolished.
(19) It is necessary to adapt the special flat-rate scheme for farmers in view of the change of the system for the taxation of intra-Union supplies of goods in such way that the overall objective of that scheme remains achieved. By excluding the supplies made by farmers under the flat-rate scheme from the definition of intra-Union supplies, the place of supply of their cross-border B2B supplies of goods should remain to be the place of departure of the goods and the flat-rate compensation fixed by the Member State of departure should be applied on these supplies.
(20) In order to reduce the administrative burden for businesses, the scope of the current special scheme for taxable persons established in the Union making supplies of services or certain supplies of goods to consumers (B2C supplies) should be extended by covering all supplies of goods and services for which the person liable for the payment of the VAT is not established in the Member State in which the supply takes place. The scheme should apply to supplies to both consumers and to businesses.
(21) It is also appropriate to reduce the administrative burden for taxable persons not established in the Union making supplies of goods and services for which they are liable to pay VAT in one or more Member States by allowing them to make use of that special scheme when they appoint an intermediary. In order to ensure the proper collection of the tax, this intermediary should be established in the Union and become liable for the payment of VAT and for fulfilling the obligations laid down in the scheme on behalf of the taxable person not established in the Union.
(22) In order for taxable persons to fully benefit from the internal market, that special scheme should not only allow for the declaration of transactions on which VAT is due in Member States other than those in which the supplier is established but also for the deduction to be made of the VAT charged to that supplier in those Member States.
(23) In view of ensuring coherence in the VAT reporting obligations for large enterprises, the frequency of submitting VAT returns under this special scheme should be reviewed by adding that taxable persons making use of the scheme shall submit monthly VAT returns under the scheme when their annual Union turnover is above EUR 2 500 000.
(24) In order to collect the appropriate information from the taxable person for ensuring a proper monitoring of this special scheme by the tax authorities, the content of the VAT return to be submitted under this special scheme should be reviewed to take the extension of the scheme into account and to allow the corresponding right of deduction to be exercised.
(25) In order to ensure the smooth functioning of this special scheme and to avoid obstacles for taxable person making use of the opportunities of the internal market, common rules should be introduced for situations whereby the taxable person is in a credit position in the Member State of identification and/or the Member State(s) of taxation.
(26) For reason of clarity and to reduce the possibilities for any abuse or fraud, the period during which a taxable person can still deduct input VAT in a given Member State on his return submitted under this special scheme where he no longer declares transactions for which he is liable to pay VAT in that same Member State should be laid down. Such a taxable person should, on the expiry of this period, use the appropriate refund procedures for claiming VAT back.
(27) The derogations, set out in Title XIII, Chapter 1, which have potential cross-border effects should be deleted in order to avoid unnecessary complexity for taxable persons and tax administrations.
(28) As a result of the introduction of intra-Union supply of goods as a new concept, it is appropriate to replace the term Community with Union to ensure an updated and coherent use of the term.
(29) Since the objectives of this Directive, comprising the implementation of the definitive VAT system to improve the operation of VAT arrangements for cross-border B2B trade on goods, cannot be sufficiently achieved by the Member States and can therefore be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on the European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.
(30) In accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory documents12, Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. With regard to this Directive, the legislator considers the transmission of such documents to be justified.
(31) Directive 2006/112/EC should therefore be amended accordingly.