On Thursday 25 May, MEPs on the Committee on Economic and Monetary Affairs discussed the draft report by Olivier Chastel (Renew Europe, Belgian) on the European Commission's proposal on VAT in the digital age (‘ViDA’). Some disagreements have already emerged, notably over the digital billing deadline.
As a reminder, the Commission presented this initiative in December 2022 (see EUROPE 13080/19). One of its aims is to reduce VAT fraud, particularly ‘carousel’ fraud involving several businesses established in at least two EU Member States. It consists of three pillars: - real-time digital reporting; - updated VAT rules for passenger transport and short-term accommodation platforms; - a single VAT registration.
In order to “respect the principle of proportionality and neutrality”, Mr Chastel felt that there was a need for “standards that help businesses” and “that are simple, clear, effective and balanced, while harmonising procedures and obligations”.
Similarly, Lídia Pereira (EPP, Portuguese) felt that we should “avoid additional tax burdens that strangle European businesses and families” and prevent savings and investment. She deemed the initial proposal “insufficient”, and considered that there was a need for a wider reform. She believes that “better use of technology could improve VAT collection and reduce fraud”.
To achieve this, Mr Chastel proposed postponing the deadline for entry into force to 2025 instead of 2024. He also wants the deadline for electronic invoicing to be extended to 10 working days instead of the 2 working days proposed by the Commission. In his view, “this timeframe is unrealistic, especially for small and medium-sized enterprises (SMEs) that outsource their accounting”.
For Aurore Lalucq (S&D, French), represented in her absence by Portugal’s Pedro Marques, “extending the deadline would undermine the logic of real-time reporting”. Similarly, she did not consider the postponement of the implementation of electronic invoicing to be “appropriate” given that some Member States have implemented it without difficulty.
In his report, Mr Chastel proposed helping SMEs to implement the new rules, for example by providing them with appropriate software for their electronic invoices. A proposal welcomed by Ms Lalucq.
Another measure: the rapporteur suggested that the European Public Prosecutor’s Office, Eurofisc, Europol and Eurojust, which play a central role in the protection of public funds and the fight against fraud, should have “access to all sources of data enabling them to carry out their duties effectively”. The other MEPs approved this measure.
MEPs have until Wednesday 14 June to table their amendments.
Read the reports (in French): https://aeur.eu/f/733; https://aeur.eu/f/734 (Original version in French by Anne Damiani)