EU VAT Reforms – An ambitious agenda, between success stories and standstills

What was already in the pipeline before July 15, 2020

• Defintive VAT regime – target to date to implement was initially Jan 1, 2022
  • EU 2022 definitive VAT system in trouble?
• VAT Rates
  • European Commission says VAT rates reform negotiations progressing “well”
  • VAT rates will be discussed in Ecofin meeting on June 18, 2021 – Phase out of reduced VAT rates for natural gas and firewood; chemical pesticides and chemical fertilisers & extension & broadening standstill clause
• COVID-19 measures – exemptions
  • Commission waives customs duties and VAT on the import of medical equipment from non-EU countries
  • European Commission waives customs duties and VAT on the import of medical equipment from non-EU countries till Dec 31, 2021
  • Council adopts a temporary ‘buy and donate’ VAT exemption
  • COVID-19: VAT Relief on Vaccines and Test Kits for EU hospitals, medical practitioners and individuals
  • ….

On July 15, 2020, the European Commission issued ”An Action Plan for Fair and Simple taxation supporting the recovery strategy”

• European Commission issued Package for fair and simple taxation – VAT priorities ….. have a look!!
  • 25 actions covering direct and indirect tax
  • Agenda 2020/21
    • Update VAT rules financial services – Consultation (Results) Proposal delayed to 2022/23
    • Transforming the status of the VAT Committee 
    • Monitoring of dispute resolution mechanism directive – Survey
  • Agenda 2022/23
    • Single EU VAT registration
    • Modernizing VAT reporting obligations. The need to further expand e-invoicing
    • Further extending the scope of the VAT One Stop Shop
    • More consistent determination of tax residence (fixed establishment)
    • The verifications of cross-border transactions must be reinforced
    • New technologies at disposal of Member States would make cross-border transactions easier for honest businesses that want to be compliant with VAT rules
    • Revise the VAT special scheme for travel agents – Evaluation consultation – Possible proposal in 2023
    • Adapt the VAT framework to the platform economy
    • Greener taxation of the passenger transport sector
  • EU ”Package for fair and simple taxation” – Status at the end of 2020

On July 1, 2021, implementation of the EU VAT E-Commerce Directive … a success?

• EU VAT and B2C E-Commerce: Overview of the changes on 1 July 2021 – Consolidated version

What’s next?

VAT in the Digital Age

• It started with a Fiscalis Conference on “VAT in Digital Age” on Dec 6, 2019
• Fiscalis conference on real time reporting and e-invoicing for VAT Sept 23-25, 2020
• Fiscalis 2021 Workshop “VAT in the Digital Age” (May 31 – June 2, 2021)
• Status Oct 2021 – EU VAT in the Digital Age reforms update – 3 reforms – E-Invoicing/RTR, platforms/e-commerce, single EU VAT registration
• A Fiscalis meeting took place Oct 27-29, 2021