The EU Finance Ministers are due to discuss a number of tax issues at the next ‘Economic and Financial Affairs’ Council, the last of the Swedish Presidency, on Friday 16 June. According to two documents dated Friday 2 June, to which EUROPE has had access, they will be discussing the ‘VAT in the digital age’ or ‘ViDA’ initiative. They are also invited to adopt a report on various tax issues.
ViDA. In December 2022, the Commission presented an initiative to modernise the value added tax (VAT) system through real-time digital reporting, updated rules for passenger transport and short-term accommodation platforms and a single VAT registration (see EUROPE 13080/19).
The EU Council’s Working Party on Tax Questions has analysed the translation of these concepts and procedures into the legal text of the directive and regulation. There is a “broad consensus” on setting up an intra-EU digital declaration system based on electronic invoicing, but the detailed arrangements for electronic invoicing and digital declaration still require work, the document states.
Taking account of delegations’ comments, the Swedish Presidency presented a compromise text on the articles relating to the platform economy in the amending directive and the amending implementing regulation, which simplifies and limits the scope of the provision relating to the deemed supplier, and amends the definition of short-term accommodation rental. “The text was broadly welcomed by delegations as a solid basis for further work”, the document states.
The single VAT registration has also been very positively received, but raises some concerns, such as the capacity to enforce a mandatory import one-stop shop for electronic interfaces or the extension of the deemed supplier provision in certain situations, which has raised objections from many Member States.
Three questions will therefore be put to the ministers concerning a coherent electronic declaration framework, the role of platforms, the one-stop-shop concept and the reverse charge mechanism.
To read the document, go to: https://aeur.eu/f/78f
‘UNSHELL’. The second text summarises progress on a number of dossiers, in particular the proposed ‘UNSHELL’ directive, which sets out rules to prevent the abuse of shell companies for tax purposes. The Swedish Presidency of the Council has drawn up partial compromise texts and information notes on several aspects of the draft directive (see EUROPE 13148/24), including a timetable for reporting deadlines and a compromise text on the directive as a whole.
Progress has been made on a number of controversial issues, such as scope, minimum substance criteria, tax consequences and the tax residence certificate. The work must continue. Member States share the objective of limiting administrative burdens for both taxpayers and tax administrations. “The delegations stressed the interlinkages between different parts of this complex directive, meaning that an orientation chosen in one part of the directive might influence the solution in other parts”, the document points out.
ETD. The text also takes stock of work on the revision of the Energy Taxation Directive, part of the ‘Fit for 55’ package, which aims to achieve climate neutrality by 2050. The Swedish Presidency has proposed compromises and information notes on specific subjects, notably concerning taxation of the aviation and maritime sectors, including fisheries, as well as electricity (see EUROPE 13116/13).
“Delegations supported several discussed changes, but some delegations were not yet in a position to support the Presidency text or had scrutiny reservations”, the document states.
Read the document: https://aeur.eu/f/78g (Original version in French by Anne Damiani)