Strasbourg, 15/12/2000 (Agence Europe) - During its vote at first reading (codecision procedure) on the proposal aimed at amending the directive on the value added tax (VAT) applicable to certain services provided by electronic means, the European Parliament approved the proposal with some changes. It mainly provides for all European and non-European providers of this kind of service to pay VAT when they sell to European consumers. One of the changes approved by the EP in approval of its rapporteur, José Manuel Garcia-Margallo y Marfil (EPP, Spain), mainly provides for VAT exemption for suppliers whose annual turnover is below EUR 40,000 (while the Commission proposed such an exemption when the turnover is below EUR 100,000).
Furthermore, the plenary adopted an amendment calling on the European Commission to present, by summer 2001, "supplementary analyses" mainly on: - the way to guarantee equal treatment between Union service providers and third country providers; - the consequences of the VAT regime on decisions by electronic service providers, concerning their place of location; - the way to guarantee better coordination between regulations at EU level and the efforts deployed at international level; - the possibilities for establishing a system for reimbursement between member States.
The Parliament calls on the Commission to raise, in another proposal, the question of breaking down the "electronic" VAT receipts between Member States. The proposal provides for non-European suppliers, whose annual sales in the EU exceed EUR 100,000, to have to register in at least one Member State that will be responsible for application of the tax. MEPs draw attention to the fact that these providers would be naturally tempted to register in a country (for example, Luxembourg) where the level of VAT is lowest.