Strasbourg, 08/09/2005 (Agence Europe) - On Wednesday, the European Parliament adopted the consultation report by Zsolt László Becsey (EPP-ED, Hungary) on two legislative proposals aiming to simplify obligations relating to value added tax (VAT). This report makes no major changes to the legislative proposals of the Commission, which bring in a one-stop-shop system, which will be electronic and optional, for VAT declarations (see EUROPE 8821). Effectively, the parliament is in favour of the implementation of the one-stop-shop system "as soon as possible". This system would allow a company which is liable for VAT to use the VAT number under which it is registered in its Member State of establishment, for all the services it provides in other Member States.
Despite the opposition of the PES group, the MEPs accepted the rapporteur's proposal of bringing in a minimum threshold of 50,000 EUR for VAT exemption, and which would only affect the first three years activity for newly-created small and medium-sized enterprises (SME). They have kept in place the Commission's proposal to establish a maximum turnover threshold of 100,000 EUR, below which companies would be exempted from the VAT.
The "Becsey" report brings in a time limit of 20 days for liable companies to register. These must observe the same time limit to inform the Member State of identification of any changes to data relating to their registration. In order to reduce the administrative burden, companies must hold the VAT documents and reports in the Member State of establishment. Lastly, the MEPs suggest that the new regime should be revised fthe our years after its entry into force.
Within the Council, negotiations on this dossier are likely to begin under the current UK Presidency. The entry into force of the new system is scheduled for 1 July 2006.