Changes from report parliamentary committee draft to plenary report

EXPLANATORY STATEMENT

Change 4

RemovedOn 8 December 2022, the Commission presented the ‘VAT in the digital age’ package (ViDA), which consists of three proposals:

AddedThe European Commission proposed on December 8, 2022 a package of new measures updating the VAT Directive (2006/112/EC), the Council Implementing Regulation (EU) 282/2011 and the Council Regulation on administrative cooperation (EU 904/2010) to adapt to new digital business models and to allow the full use of data generated by digitization.

Removed a proposal for a Council directive amending directive 2006/112/EC as regards VAT rules for the digital age;

AddedThese proposed directive and regulations are expected to enter into force gradually between January 2024 and January 2028. Your rapporteur believes that these deadlines should, given the delay in the legislative process, be postponed by at least one year overall.

Removed a proposal for a Council regulation amending regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age

AddedWith these measures, the Commission hopes to reduce the VAT gap, better combat VAT fraud, ensure the proper functioning of the internal market and put an end to distortions of competition.

Removed a proposal for a Council implementing regulation amending implementing regulation (EU) No 282/2011 as regards information requirements for certain VAT schemes.

AddedIn this respect, your rapporteur stresses the need to respect the principle of proportionality between the objective of combating fraud and the difficulties that might arise in applying the proposed rules to the real life of businesses. The fight against fraud must not be to the detriment of the majority of businesses that work in transparency and good faith.

Change 5

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Change 6

Removedi) a new real time digital reporting system based on e-invoicing,

AddedWith the switch to real-time digital declaration based on electronic invoicing, stricter conditions will be imposed on companies carrying out intra-European transactions for all B2B deliveries of goods and services in the name of the fight against fraud.

Removedii) update VAT rules for the platform economy and

AddedYour rapporteur underlines the additional burdens that the implementation of this system will create for businesses. He recalls that the impact assessment states “Businesses will bear the costs of the additional administrative burden arising from the introduction of real-time digital declaration. This burden will be higher for micro and small enterprises”. Therefore, your rapporteur believes that these measures should be accompanied by incentives for businesses to encourage the optimal implementation of VAT in the Digital Age.

Removediii) a single vat registration for businesses selling to consumers across the EU.

AddedYour rapporteur believes that the two working day deadline for issuing and declaring invoices is not realistic for businesses, especially SMEs, and should be reviewed to a ten working days basis. Similarly, the deletion of the possibility of issuing summary invoices runs counter to the principles of flexibility and simplicity that govern this proposal.

RemovedThe directive and the regulation were subject to a special legislative procedure. The European Parliament was consulted and delivered its opinion on 22 November 2023.

AddedYour rapporteur stresses that the proposals must be simple, effective and balanced for all parties concerned, in particular for SMEs, VSEs and Not-profit-bodies.

RemovedOn 5 November 2024, the Council agreed on the ViDA package. However, given the substantial differences between the Commission’s proposal (i.e. the Directive) on which the European Parliament was initially consulted and the text of the Council, the Council decided on 7 November 2024 to re-consult the European Parliament.

AddedAs regards the updating of the VAT rules applicable to passenger transport and short-term accommodation platforms, justified by the emergence of new business models, your rapporteur recalls that these new measures must be clear, non-discriminatory and neutral. He believes that the liability of the "presumed supplier/provider" instead of the "underlying provider" could increase the final price for the consumer.

RemovedThe deemed supplier regime was a significant point of contention within the Council, making it particularly challenging to reach a final compromise.

AddedFinally, your rapporteur considers that the Single registration is one of the improvements most appreciated by EU companies, especially SMEs, which have a real need for simplification of intra-EU declaration procedures. Nevertheless, your rapporteur is concerned that the mandatory reverse charge will lead to an increase in VAT fraud and proposes that an independent study must be carried out on the reduction of VAT fraud in case of taxation of intra-Community supplies of goods and services.

RemovedThe Council decided that the deemed supplier rules will be introduced first on a voluntary basis as from July 1, 2028, and then mandatory as from January 1, 2030. Member States will also be authorised to exempt SMEs from the deemed supplier regime without having to report to the VAT committee. In its first opinion, the EP highlighted the need to limit the administrative burden for SMEs.

AddedFurthermore, the inclusion of second-hand goods in the UOSS system could be problematic because it is not possible for a marketplace to know the margin made by a third-party seller.

RemovedThe Council also introduced more flexibility for Member States to operate their own invoicing systems as many member states have already invested heavily in their own software. Summary invoices are also reintroduced under certain conditions despite the Commission’s proposal to prohibit them. The Parliament also favoured the reintroduction of summary invoices in order to keep flexibility and simplicity for Member States and businesses.

RemovedOn the implementation deadlines, the Parliament opinion suggested longer deadlines than in the Commission proposal. The Council even further extents the deadlines beyond the Parliament’s proposals.

RemovedTherefore, the rapporteur is of the view that a simplified procedure without amendments is the relevant procedure.