The Directive on the simplification of value added tax (VAT) for small and medium-sized enterprises (SMEs) is still a challenge for the EU Council (see EUROPE 11942/2). Member States' ambassadors to the EU (Coreper) will discuss a new compromise text on Wednesday 5 June, but should return the dossier to the technical level, a European source said on Tuesday 4 June.
The dossier had already been removed from the agenda of the Ecofin Council of 17 May (see EUROPE 12251/13) and will probably not be on the agenda of 14 June either.
The obstruction, according to a note from the Romanian Presidency of the Council of the EU dated 29 May, of which EUROPE has had a copy, continues to be the national and European thresholds for VAT exemption for SMEs.
The new compromise text now sets the national annual turnover threshold until which supplies of goods and services made by small enterprises may be exempt from VAT at 100,000 euros.
The text foresees that, under certain conditions, Member states that allow VAT exemption to small enterprises established in their territory would have to be obliged to apply such exemption to supplies made in their territory by taxable persons established in another Member State. To this end, the Union annual turnover of such taxable should not exceed 115,000 euros, according to the text.
But some countries, such as Sweden, would find this threshold too high, while others, notably the Netherlands and Ireland, would have indicated that they could not accept lower thresholds.
Discussions are also ongoing on the occasional excess of turnover thresholds and, in particular, on whether the obligation to cease to apply the exemption should be immediate or whether it may only apply as from the next reporting period.
Delegations have also not yet been able to agree on the frequency of reporting by taxable persons to tax authorities of the Member States in which they are established, nor on the scope of the information, the note states.
The date of application also continues to be a matter of debate. The Commission had proposed that the new provisions should apply from 1 July 2022, but the Presidency proposed postponing the date of application to 1 January 2024. Several countries continue to argue in favour of extending the deadline to 2025 or even 2026. (Original version in French by Marion Fontana)