On Tuesday 10 October, the committee on economic and monetary affairs of the European Parliament took a position on its report on two proposals on VAT, one on e-commerce and the other on administrative cooperation and the fight against fraud. The rapporteurs were Cătălin Sorin Ivan (S&D, Romania) and Luděk Niedermayer (EPP, Czech Republic) respectively.
Ivan's report was adopted by 47 votes to one with six abstentions and Niedermayer's by 53 votes to one.
On each of these proposals, the Parliament's work has been somewhat fluid. On the former, concerning e-commerce, the MEPs included an obligation for electronic platforms such as eBay and Amazon to be jointly liable for VAT where there is a risk that suppliers based in third countries will not pay it.
In this report, one of the only difficult issues concerns thresholds.
Readers may recall that the Commission proposed that businesses registering annual cross-border sales of less than €100,000 be allowed to use simpler procedures to determine the place of residence of their clients. Businesses registering cross-border sales of less than €10,000 a year will be able to continue to apply the VAT rules generally used in their country of origin. These thresholds may be applied to electronic services from 2018 and, by 2021 the latest, to goods sold online (see EUROPE 11680).
As the ALDE group called for, the second threshold has been raised from €10,000 to €35,000 a year (a proposal also supported by the ECR group). The Greens/EFA group wanted to raise it to €100,000 and to reduce the first threshold from €100,000 to €35,000 (see EUROPE 11851).
This much-needed update of the VAT rules for e-commerce is critical to follow the pace of advances in new technologies and the rise of the digital economy. It will reduce compliance costs, stimulate trade and make it easier for small businesses to access the European market, Ivan said.
In the Niedermayer report, only the question of the date of entry into force was apparently a major issue. The S&D group wanted to bring this forward to 2019, but the final report retains the Commission's proposal of 2021.
In its press release, the European Parliament states that the member state responsible for collecting the VAT payable would be paid a fee of 5% of the VAT amount by the member state of consumption. Niedermayer said that the text would help to prevent fraud and improve the collection of VAT.
Both texts will be voted upon in plenary before the end of the year. On taxation dossiers, the Parliament's position is only a non-binding opinion for the Council. (Original version in French by Élodie Lamer)