At the Ecofin Council on Friday 25 May, the European finance ministers failed to reach unanimous agreement on three dossiers related to value-added tax (VAT) (see EUROPE 12026).
An agreement was, however, hoped for on reinforcing administrative cooperation between member states in the fight against fraud. This hope was rapidly quashed when the French minister took the floor.
Bruno Le Maire acknowledged that the members were “very close to an agreement”, but added that an extra month was necessary. The reason for this is a difference of interpretation concerning the involvement of investigators in a tax control in a member state other than their country of origin. He considers that an adjustment of this kind would “make the mechanism fully applicable and credible”.
Addressing the press, the president-in-exercise of the Ecofin Council, Vladislav Goranov, regretted the fact that it had not been possible to reach an agreement on Wednesday.
A favourable outcome to the other two VAT-related texts on the agenda of the ministerial meeting was always less likely (see EUROPE 12026). The ongoing clash between Paris and Prague over VAT applicable to electronic publications and the introduction in the Czech Republic of a general reverse-charge VAT system could not be overcome (see EUROPE 11624).
Goranov expressed regret that the negotiations were deadlocked “due to the existence of two camps”. “As finance minister of Bulgaria, I think I can say that this type of attitude is unacceptable”, he added.
Le Maire proposed that the reverse-charge VAT system be extended sectorially, rather than across the board. The Czech Republic opposed this, preferring the current compromise of the Bulgarian Presidency of the Council. In the opposite corner, France is in favour of the electronic publications text currently on the table, whilst the Czech Republic considers that there are technical difficulties with it. (Original version in French by Lucas Tripoteau)