On Friday 13 July, the European finance ministers failed for the third time to agree on two value-added tax (VAT) dossiers whose destinies are intertwined. A fourth attempt is already on the agenda of October's 'Ecofin' Council.
Friday's meeting was no exception to the logic that has prevailed since June 2017: the Czech Republic is blocking the proposal to apply reduced rates to electronic publications ('e-books') in response to France's opposition in principle to the proposal allowing Prague to carry out a pilot project for a reverse-charge VAT scheme (see EUROPE 11810).
The chances of reaching an agreement were never terribly high (see EUROPE 12061). The Austrian Presidency of the Council nonetheless hailed a “change in position that may open the door to an agreement in October”.
During the discussion on the reverse-charge mechanism, the three parties to the negotiations took the floor. The Czech Republic reiterated its commitment to this proposal and referred to the conclusions of the European Council of 28 and 29 June (see EUROPE 12052). France argued that there was still work to be done to reach an agreement that is unanimously acceptable. As for Slovenia, its position has not changed and it was not in a position to give its agreement on Friday.
“What is new for us is that we now have a Parliament in Slovenia, which opens the door for us to ask the Parliament to revisit the issue and our position. But in order for our government to do this in a credible way, we need further work on the proposal”, explained the Slovenian Secretary of State, Gorazd Renčelj, who is confident that an agreement is possible in the near future.
Without wishing to hold up the negotiations further, Greece asked to be involved in the forthcoming technical negotiations on the text.
At the end of the discussions, the Czech minister, Alena Schillerová, said that it was a “positive signal. I would be very glad if we could agree to state that in principle, we are ready to consent to the general reverse-charge mechanism in October and that some technical work should be completed before the beginning of September while the key principles and cornerstones of the proposals should remain preserved”, she concluded.
E-books. The ministers also failed to agree on the 'electronic publications' dossier, on which no more technical work is necessary.
The European Commissioner for Taxation, Pierre Moscovici, took a different tack this time, criticising blockage factors that are “entirely external to this proposal”.
“As we have made progress on the reverse-charge mechanism, as we are very clearly on the way to an agreement on this point, let us give a sign (…) that we are capable of common sense, responsibility and mutual trust, and let us adopt this text now, right away”, he said.
However, the Czech Republic appears unwilling to give any ground until the 'reverse-charge' dossier is in the bag. Taking the floor very briefly, the minister said that her country would be as flexible as possible “in the near future”.
The Austrian Presidency – which considers that the near future could be October – considers that this is already a “positive step”. (Original version in French by Marion Fontana)