On Friday 12 July, the European finance ministers will once again discuss the two controversial VAT dossiers, which aim to: - apply reduced rates to electronic books ('e-books') and - allow certain member states to carry out pilot projects for a reverse-charge mechanism with a view to preventing VAT fraud (see EUROPE 11692). The chances of reaching an agreement are virtually zero.
Since June 2017, these two dossiers have been caught up in an ongoing clash between Paris and Prague (see EUROPE 11810) and in May 2018, no unanimous agreement was possible at the Council (see EUROPE 12027).
The Czech Republic asked for the point on the reverse-charge mechanism to be added to the agenda first; the e-books text was not on it. The latter was then added, by request of Belgium and Sweden, invoking the political link between the two dossiers.
Basically, the texts have not changed one jot since May. On electronic publications, the technical work is finished and the text is not expected to change further. On reverse-charge, on the other hand, some observers consider that progress could still be made, for instance by building in more guarantees.
Earlier this week, some sources predicted a possible agreement on Friday on the 'e-books' dossier in exchange for a commitment for an agreement on 'reverse-charge' in October. On Thursday, however, all hopes of an agreement were gone. There will therefore be no more than an exchange of views on the two texts.
France will not run into problems over this, a diplomatic source added.
If there are zero expectations, why bother putting the texts on the agenda? It would appear that the Austrian Presidency of the Council is hoping to test the water, showing sensitivity to both sides' arguments.
According to a different source, the aim is mainly to follow up on - but also to create impetus for - the conclusions of the European Council of 28 and 29 June, in which the heads of state or government undertook to make rapid progress on the Commission's proposals concerning short-term measures for the effective collection of VAT (see EUROPE 12052). Additionally, several bilateral contacts are reported to have taken place.
US tax reform. Over breakfast, the Commissioner for Economic and Financial Affairs, Pierre Moscovici, will take stock of recent developments concerning the tax reform in the United States, which has led to much concern (see EUROPE 11965).
Although there is little progress to report, one source expects the Commissioner to report back on contacts with his American counterparts.
Another expected point of information: the Commissioners for Financial Services, Valdis Dombrovskis, and Growth, Jyrki Katainen, will present the ministers with several sectorial proposals related to the post-2020 multiannual financial framework.
Austrian priorities. The Austrian Presidency will prepare for the traditional presentation of its programme of work in the economic, financial and fiscal fields for the next six months.
In Vienna, the Austrian finance minister, Hartwig Löger, said that he was prioritising the reduction over the sharing of banking risks to complete Banking Union in the Eurozone (see EUROPE 12057). He also laid emphasis on taxing digital platforms.
The Council will definitively approve the country-specific recommendations enshrined at the European summit (see EUROPE 12025) and will agree on the EU's position ahead of the 'Finance G20' (21 and 22 July in Buenos Aires). (Original version in French by Marion Fontana)