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Indirect Tax Weekly Digest
Your weekly update on Indirect Tax topics
Read all about the latest developments in the field of Indirect Taxation in the Netherlands, the EU and the UK and globally.
14 December 2021
ECOFIN reaches agreement on updated rules for VAT rates
The ECOFIN reached agreement on a new framework for VAT rates. Member States are treated equally and given more flexibility to apply reduced and zero VAT rates. The list of goods and services for which reduced VAT rates are allowed (Annex III of the VAT directive; the ‘negative’ list is off the table) is updated and modernised, taking into account the digital transformation of the economy. Environmentally-friendly goods and services are introduced for which reduced rates are allowed, such as solar panels, electric bicycles and waste recycling services. Preferential treatments for environmentally harmful goods (e.g. fossil fuels) are phased out. Member States will be able to respond swiftly to exceptional circumstances, like pandemics, humanitarian crises or natural disasters. Once the European Parliament has issued its opinion on the proposal, the Council will formally adopt the directive. Implementation of the measures is foreseen for 1 January 2025. More on this here.
Relevant for: businesses involved in cross-border trade and dealing with VAT rates in other Member States
Contact: Jurgen de Kok
2021 VAT gap report published: €4,000 in VAT revenues lost every second in the EU
The 2021 Report on the VAT Gap was released by the European Commission today. EU Member States lost an estimated € 134 billion in VAT revenues, equating to a total revenue loss across the EU of 10.3% in 2019 (pre-COVID-19 pandemic). Compared to 2018, the Gap went down by approximately 0.8 percentage points and € 6.6 billion. The VAT Gap provides an estimate of the VAT revenue loss due to tax fraud, tax evasion, tax avoidance and optimisation practices, bankruptcies, financial insolvencies, as well as miscalculations and administrative errors.
Relevant for: all businesses in general
Contact: Lex Neijtzell de Wilde
New Guidelines VAT Committee published
The VAT Committee has published new Guidelines on the following topics:
- B2C distance sales: Calculation of the EU place-of-supply threshold of EUR 10,000 when a stock of goods is considered (not) to be a fixed establishment;
- B2B quick fix call-off stock arrangements: moment when the goods are considered as returned and accounting methods to determine which goods are returned;
- The qualification and the applicable place of supply rules of video chatting with the CJEU Geelen case (C‑568/17) in mind;
- Unanimously agreement on the VAT rules applicable to transactions related to the recharging of electric vehicles;
- Agreement on conditions to apply the exemption of educational services to vocational training such as maritime security and safety training;
- Various shapes of gold fall within the definition of “investment gold” used for the special scheme for investment gold.
The list of all VAT Committee Guidelines can be found here.
Relevant for: businesses involved in cross-border trade and supplying cross-border services
Contact: John Gruson