The European Commission proposed, on Friday 8 May, the postponement of the application of several tax measures in order to take into account the difficulties encountered by Member States’ businesses and tax administrations in dealing with the Covid-19 pandemic.
ACD. The Commission first proposed extending certain deadlines for the exchange of information under the Administrative Cooperation Directive (ACD).
In particular, it suggests that Member States should be allowed an additional 3 months, until 31 December 2020, to exchange information on financial accounts whose beneficiaries are tax residents of another Member State and an additional 3 months to exchange information on certain cross-border tax planning arrangements.
These amendments concern only the deadlines for reporting obligations, the Commission points out. The proposed periods may be extended once by means of delegated acts for a maximum of 3 additional months, depending on the evolution of the pandemic.
While agreeing to bring forward these amendments, the Commission nevertheless recalls that the exchange of information is crucial to combat tax avoidance and evasion in the EU - tax revenues that Member States will need to finance their economies during and after the pandemic.
Furthermore, the Commission did not give in to pressure from the financial industry to postpone the application of the ‘ACD 6’ Directive until 2021 (see EUROPE 12471/17), since it is maintaining its date of application at 1 July 2020.
e-commerce. The Commission has also proposed a 6-month postponement of the entry into force of the legislative package on the modernisation of VAT for cross-border e-commerce, a package adopted in 2017 (see EUROPE 11919/3). The new rules would therefore apply from 1 July 2021 instead of 1 January 2021.
The Commission explains that it consulted the Member States on this subject on 24 April and that the Member States agreed to a postponement of no more than 6 months. This measure had also been requested by postal service operators, it said.
It justifies its choice of different extension periods on the grounds that, under the ACD Directive, the exchange of information relies on an existing IT system, whereas the VAT package for e-commerce requires both the adaptation of existing IT systems and the introduction of new systems by the Member States.
See the proposed amendments: https://bit.ly/2L9E9nF (Original version in French by Marion Fontana)