Ecofin report on tax issues, incl. VAT & the definitive VAT regime

This report provides an overview of the progress achieved in the Council during the term of the Croatian Presidency, as well as an overview of the state of play of the most important dossiers under negotiations in the area of taxation.

In spite of the hindrances caused by the COVID-19 pandemic, the work during the Croatian Presidency term continued on a number of key files, such as digital taxation, rules on mandatory transmission and exchange of VAT-relevant payment information, simplification of VAT rules for small enterprises, the future of VAT rates, update on the EU rules on structures of excise duties on alcohol, updates to the EU list of non-cooperative jurisdictions for tax purposes

Which VAT files have been discussed during the Croation presidency?

a) Definitive VAT System;
b) VAT rates reform;
c) Mandatory transmission and exchange of VAT-relevant payment information;
d) Simplification of VAT rules for small enterprises;
e) Structures of excise duties on alcohol and alcoholic beverages;
f) Structures and rates of excise duties on manufactured tobacco;

On the Definitive VAT regime ….

• A majority of the Member States oppose the idea of introducing a concept of a certified taxable person and to apply different rules dependent on whether the customer is a CTP or not.
• Member States strongly oppose the abolition of the recapitulative statement requirement for intra-Union supplies of goods, if there is no effective replacement of this measure.
• The majority of Member States are concerned about potential negative effects of the supplier’s liability, such as administrative burden and costs for businesses, burden and costs for tax authorities, revenue losses in cases of insolvency and/or negative impact due to other forms of fraud. A number of Member States have voiced concerns that they may have difficulties in ensuring collection of tax from non-established suppliers while having to refund
  input VAT to customers.

Source EU Council

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