What changed between the draft committee report of 5 May 2023 and the draft committee report of 13 Dec 2024

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

Changed:on the proposal for adraft Council directive amending Directive 2006/112/EC as regards VAT rules for the digital age

Changed:(COM(2022)0701(15159/2024 – C90021/2023C100170/2024 – 2022/0407(CNS))

Changed:(Special legislative procedure – renewed consultation)

The European Parliament,

Added:– having regard to the Council draft (15159/2024),

– having regard to the Commission proposal to the Council (COM(2022)0701),

Removed:– having regard to Article 113 of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C90021/2023),

Added:– having regard to its position of 22 November 2023,

Removed:– having regard to Rule 82 of its Rules of Procedure,

Added:– having regard to Article 113 of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament again (C100170/2024),

Changed:– having regard to the report ofRule the84 Committeeand on86 Economicof andits MonetaryRules Affairsof (A90000/2023),Procedure,

Change 1

Removed:1. Approves the Commission proposal as amended;

Added:– having regard to the report of the Committee on Economic and Monetary Affairs (A100000/2024),

Removed:2. Calls on the Commission to alter its proposal accordingly, in accordance with Article 293(2) of the Treaty on the Functioning of the European Union;

Added:1. Approves the Council draft;

2. Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

Change 2

Changed:4.3. Asks the Council to consult Parliament again if it intends to substantially amend theits Commissiondraft proposal;substantially;

4. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 3

Removed:Recital 1 a (new): (1a) The package ‘VAT in the Digital Age’, of which this Directive forms a part, aims to respect the principle of proportionality as regards, on the one hand, the objective of combating fraud and, on the other hand, the difficulties that might arise in the application of the proposed rules for companies, especially for SMEs and very small enterprises (VSEs), in the day-to-day running of businesses and for national authorities. The rules of that package should be simple, clear, effective and balanced for all parties involved, tax authorities as well as entrepreneurs. The reforms proposed by this Directive aim to work in practice for businesses and administrative authorities.

Removed:Recital 1 b (new): (1b) The package ‘VAT in the Digital Age’ aims to ensure full respect for fundamental rights to privacy and personal data protection, as well as the applicability of Regulations (EU) 2016/6791a and (EU) 2018/17251b of the European Parliament and of the Council to the processing of personal data. The information collected should only be able to be processed for the purpose of combating fraud by the competent tax authorities. / 1a Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1). / 1b Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39).

Removed:Recital 1 c (new): (1c) The Commission should ensure that taxpayers’ rights are respected given that tax authorities will have access to vast amounts of data, including from algorithmic data analysis systems. The use of new technologies should respect Union values, human rights and primary law.

Removed:Recital 2 a (new): (2a) The reform of the Union’s VAT system aims to safeguard tax revenue, reduce administrative costs for taxable businesses and eliminate trade barriers in the internal market. In that respect, the harmonisation of procedures is essential both for businesses and for the functioning of the internal market.

Removed:Recital 3 a (new): (3a) The ‘VAT gap’ feeds the lack of trust between Union tax authorities and is much broader than missing trader intra-Community (MTIC) fraud. The best way to fight against MTIC, including carousel fraud, would be to remove the VAT exemption on intra-community supplies of goods and services, since that type of fraud is mainly due to a break in the fractioned collection of VAT. In order to better circumscribe the fight against VAT fraud, the Commission should undertake further analysis as to how an implementation of this Directive could lay the groundwork for the removal of the VAT exemption on the intra-Community supply of goods and services (i.e., the ‘definitive VAT system’).

Removed:Recital 3 b (new): (3b) The collection of data for international trade statistics (Intrastat) in the context of intra-Community transactions is an essential tool for the tax administrations of the Member States in the fight against VAT fraud and should be maintained.

Removed:Recital 3 c (new): (3c) The VAT exemption on the supply of goods and services in intra-Community transactions could increase the possibility of fraud, especially at retail level.

Removed:Recital 4: (4) In order to increase tax collection on cross-border transactions and to end the existing fragmentation stemming from Member States’ implementation of divergent reporting systems, resulting in a significant burden on businesses and ineffective cross-border controls, rules should be laid down for Union digital reporting requirements. Such rules should provide information to tax administrations on a transaction-by-transaction basis, in order to allow cross matching of data, increase the control capabilities of tax administrations and create a deterrent effect on non-compliance, while reducing compliance costs for businesses operating in different Member States and eliminating barriers within the internal market.

Removed:Recital 4 a (new): (4a) Digital reporting requirements aimed at providing information to tax authorities on a transaction-by-transaction basis should remain fair, realisable and balanced in accordance with the principle of proportionality. The reliability of technological solutions for detecting fraud should result in increased legal certainty for taxpayers.

Removed:Recital 6: (6) The definition of an electronic invoice should be aligned with that used in Directive 2014/55/EU of the European Parliament and the Council64, to achieve standardisation in the area of VAT reporting. However, businesses, in particular SMEs, VSEs and not-for-profit bodies, should remain free to adopt other standards in line with Article 217 of Directive 2006/112/EC.

Removed:Recital 6 a (new): (6a) In order to help businesses and tax administrations, the content of the European electronic invoicing standard should be made accessible, simple and clear, in particular by publishing on the Commission's website all relevant information relating to that standard. However, given that the European electronic invoicing standard referred to in Directive 2014/55/EU is adapted to a ‘business to government’ (B2G) context, its evolution should be planned to take into account ‘business to business’ (B2B) needs.

Removed:Recital 7: (7) For the VAT reporting system to be implemented in an efficient manner, it is necessary that the information reaches the tax administration without delay. Therefore, the deadline for the issuance of an invoice for cross-border transactions should be set at 10 working days after the chargeable event has taken place. The limitation periods for the prosecution of VAT fraud should be adjusted accordingly.

Removed:Recital 10 a (new): (10a) Summary invoices save time and costs and reduce the administrative burden related to invoicing. Moreover, they reduce the possibility of errors and simplify the work for suppliers and customers thanks to simplified record keeping. Their abolition would cause considerable damage and entail additional costs for businesses.

Removed:Recital 12: (12) The growing flow of information exchanged daily requires high-performance computer software capable of transmitting the information continuously to national administrations in a secure manner. In order to facilitate for taxable persons, in particular SMEs, VSEs and not-for-profit bodies, the transmission of the invoice data, Member States should provide the taxable persons with the financial and other means that are necessary for such transmission. Those means could in particular be used for the installation of adapted software and for trainings relating to the new rules, in order to allow that the data is sent by the taxable person directly or by a third party on that taxable person’s behalf.

Removed:Recital 13: (13) Whilst the information to be transmitted through the digital reporting requirements for intra-Community transactions should be similar to what was transmitted through the recapitulative statements, it is necessary to request taxable persons to provide additional data, including bank details and payment amounts, so that tax administrations can follow not only the goods but also the financial flows and obtain appropriate information on the financial flows.

Removed:Article 226(17) of this proposal, by referring to the bank account, ipso facto, excludes payment by credit card, cash or others such as crypto-currencies.

Removed:Recital 16 a (new): (16a) Digitisation makes companies increasingly vulnerable to cybercrime and hacker attacks. The Commission and the Member States should ensure, each as far as they are concerned, the protection of data against cyber-attacks and attacks by hackers or zappers, during their transmission, transaction by transaction, and during their storage by tax authorities.

Removed:Recital 16 b (new): (16b) The rules governing electronic invoicing and digital reporting requirements do not apply to defence-related purchases, which are exempted under Articles 143 and 151 of Directive 2006/112/EC.

Removed:Recital 16 c (new): (16c) In order to ensure the security of the data transmitted, the Commission should determine the way in which the data can be examined by the tax authorities concerned and should draw up an exhaustive list of those authorities. EPPO, Eurofisc, OLAF and Europol should be on that list.

Removed:Recital 17: (17) Several Member States have put in place, in accordance with Article 273 of Directive 2006/112/EC, divergent reporting requirements for transactions within their territories, leading to significant administrative burdens for taxable persons which operate in different Member States, as they need to adapt their accounting systems to comply with those requirements. Those divergent reporting requirements prejudice the functioning of the internal market. In order to avoid the costs derived from non-harmonised digital reporting requirements, which have led to the fragmentation of the regulatory framework, the systems implemented in Member States to report supplies of goods and services for consideration between taxable persons within their territory should comply with the same features of the system implemented for intra-Community transactions. Member States should provide for the electronic means for the transmission of the information and, as is the case for intra-Community transactions, it should be possible for the taxable person to submit the data in accordance with the European standard laid down in Implementing Decision (EU) 2017/1870, even though the relevant Member State could provide for additional means to transmit the data. The data should be allowed to be sent by the taxable person directly or by a third party on that person’s behalf.

Removed:Recital 18 a (new): (18a) The collection of individuals' personal data should not under any circumstances infringe on the right to privacy of individuals. Otherwise, it would be considered as equivalent to unlawful surveillance.

Removed:The collection of such information allows conclusions to be drawn about the privacy of individuals on an unprecedented scale.

Removed:Recital 19: (19) In order to evaluate the effectiveness of the digital reporting requirements, the Commission should prepare an assessment report evaluating the impact of digital reporting requirements on the reduction of the VAT gap and in the implementation and compliance costs for taxable persons and tax administrations, in order to verify whether the system has achieved its objectives or needs further adjustments. In addition, the Commission should commission an independent study containing a comprehensive analysis on missing trader fraud, which is a particular category of VAT fraud, and in particular on the effectiveness of the digital reporting requirements in fighting such fraud. The Commission should also command an independent study to conduct a thorough assessment of the advantages and disadvantages of making IOSS mandatory.

Removed:Recital 20 a (new): (20a) In order to reduce the legal risk to which businesses, especially SMEs and VSEs, are exposed due to the complexity of VAT rates within the Union, the Commission should expand its databases into an up-to-date and legally binding tool that is easily accessible to businesses, providing real-time information on Union VAT rates and responses to tax inquiries.

Removed:Recital 23: (23) It is therefore necessary to lay down clear, balanced and proportionate rules to address the distortions of competition in the short-term accommodation rental and passenger transport sectors by changing the role that platforms play in the collection of VAT (becoming the ‘deemed supplier’). Under this model, platforms should be required to charge VAT where VAT is due but the underlying supplier does not charge it because they are, for example, a natural person or a taxable person using the special scheme for small enterprises. It is important to ensure that the principle of VAT neutrality is respected.

Removed:Recital 23 a (new): (23a) As the establishment of a deemed supplier model will entail additional costs for the platforms concerned, incentives should be provided to encourage them to comply as soon as possible and to prevent those additional costs from being passed on to the final consumer.

Removed:Recital 23 b (new): (23b) The deemed supplier scheme should not apply to small online travel agencies (OTAs), i.e. small suppliers of Short Term Rental (STR) accommodation (hosts and/or VAT-exempt businesses) that contribute to sustainable tourism in the Union and promote travel to less frequented places. In addition, the deemed supplier scheme should not provide a competitive advantage to large platforms, which are better able to bear additional costs.

Removed:Recital 23 c (new): (23c) It is important to ensure a level-playing field and to guarantee that rules are enforced for all platforms facilitating the supply of short-term rental accommodation and passenger transport within the Union.

Removed:Recital 24: (24) Member States interpret the place of supply of the facilitation service provided by the platforms to non-taxable persons differently. It is necessary to clarify this rule so that that the use of a facilitation platform does not in any way create a competitive advantage for a provider. It is also necessary, for the sake of clarity and legal certainty, to establish a uniform definition of the term "platform intermediary".

Removed:Recital 27 a (new): (27a) Under Council Directive (EU) 2021/5141a and national law, a series of obligations applies to platforms. The Commission should ensure that the relevant rules are harmonised before the entry into force of this Directive, in order to avoid any risk of double taxation as well as undue additional administrative burdens, which could harm the players in this sector. / 1a Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (OJ L 104, 25.3.2021, p. 1).

Removed:Recital 31 a (new): (31a) The implementation of various Union one-stop shop (UOSS) regimes in the Member States requires providing companies with sufficient technical specifications to ensure that the one-stop shop (OSS) declarations do not differ from one country to another and providing the possibility of downloading a file to submit an OSS declaration.

Removed:Recital 31 b (new): (31b) In order to simplify the day-to-day running of businesses, the Commission might consider consolidating the current three registrations (import one-stop shop (IOSS), Union one-stop-shop (UOSS) and non-Union one-stop shop (non-UOSS)) so that all supplies (namely, imported goods, services and domestic sales) can be declared through a single portal.

Removed:Recital 32: (32) Amongst other measures, Directive (EU) 2017/2455 extended the scope of the Mini OSS to become a broader OSS, covering all cross-border supplies of services to non-taxable persons taking place in the Union and all intra-Community distance sales of goods. Exceptionally, electronic interfaces, such as marketplaces and platforms, which become deemed suppliers for certain supplies of goods within the Union can also declare certain domestic supplies of goods in the Union OSS scheme. To support the objective of a single VAT registration in the Union, the scope of the Union OSS scheme should be further expanded to cover other supplies of goods, including domestic business-to-consumer supplies of goods in the Union by taxable persons who are not identified for VAT purposes in the Member State of consumption, ensuring that businesses do not need to register for VAT in each Member State where such supplies of goods to consumers take place. In addition, the scope of the Union OSS scheme should be expanded to also include domestic supplies of margin scheme goods to any person, when those goods are supplied by a taxable person (taxable dealer) who is not identified in the Member State were such supplies of goods take place. This amendment would allow taxable dealers to benefit from the OSS simplifications, and allow for the VAT due on those supplies to be declared and paid in one Member State of identification via the enlarged Union OSS scheme. The freedom, for taxable persons with fi…

Removed:Recital 35 a (new): (35a) IOSSs should operate transparently and securely. A unified approach to customs legislation and practice aims to put an end to inconsistencies, errors and double taxation.

Removed:Recital 36: (36) In order to ensure uniform conditions for the implementation of Directive 2006/112/EC, powers should be conferred on the Commission to better secure the correct use and the verification process of IOSS VAT identification numbers for the purposes of the exemption provided for in that Directive. This empowerment should allow the Commission to adopt an implementing act to introduce special measures to prevent certain forms of tax evasion or avoidance. Such special measures involve, inter alia, linking the unique consignment number with the IOSS VAT identification number. Those powers should be exercised in accordance with the examination procedure referred to in Article 5 of Regulation (EU) No 182/2011 of the European Parliament and of the Council71 and for this purpose the committee should be the one established by Article 58 of Regulation (EU) No 904/2010 of the European Parliament and of the Council72. Any draft implementing act is to be transmitted to the European Parliament for information, in order to enable the exercise of its rights.

Removed:Recital 38: (38) Directive 2006/112/EC provides for a simplified VAT treatment of goods transferred under call-off stock arrangements where certain prescribed conditions are met. As the OSS simplification scheme for transfers of own goods is comprehensive and encompasses cross-border movements of goods that are currently covered by call-off stock arrangements under article 17a of that Directive, it is necessary to phase out these arrangements by including an end date prior to the complete removal of the call-off stock provisions in Directive 2006/112/EC. Therefore, an end date of 31 December 2025 should be laid down, after which it will no longer be possible to effect any new call-off stock arrangements. For call-off stock arrangements commencing on or before 31 December 2025, the relevant conditions, including the 12 month time limit for transferring ownership of those goods to the intended purchaser, should continue to apply. In parallel with the inclusion of this new end date, a new paragraph should be inserted in the provisions pertaining to call-off stock arrangements to ensure that those arrangements will cease to apply on 31 December 2026, as they will no longer be required after that date.

Removed:Recital 39 a (new): (39a) Recognising the importance of sustainable practices, it is important to ensure that the method for calculating the VAT on the profit margin for the sale of second-hand and collectible goods is simple and clear. The Union should consider whether other calculation methods (for example, an average VAT margin rate provided by the seller and by category of objects) are needed in order to improve the application and workings of the VAT margin scheme for second-hand goods.

Removed:Marketplaces have no idea how to capture the VAT margin applicable to second-hand and collective goods. Each country has its own tax practice in a number of areas. Similarly, the basis for calculating the margin is not identical within the EU either, since the element eligible for inclusion in the purchase price may differ from country to another. In addition, the environmental objectives commend for the re-use of goods and the circulation of second-hand goods. Creating more tax and administrative burdens could be a brake on cross-border trade of such goods.

Removed:Recital 41 a (new): (41a) The expansion of cloud computing services, as a result of digital reporting requirements, may lead to an increase in greenhouse gas emissions. The Commission should take measures and provide incentives to ensure the "greening" of the digital sector, for example by centralising data centres to optimise their functioning, by helping companies to use renewable energies instead of fossil fuels to power them and by using artificial intelligence to reduce their pollution.

Removed:Recital 41 b (new): (41b) Implementing digital reporting requirements in the markets of the 27 Member States simultaneously in 2028 will be extremely challenging, draining IT resources to breaking point. A progressive implementation of the digital reporting requirements would avoid a lack of capacity in qualified personnel to allow adaptation of all the software of the companies. Practical solutions to reduce implementation costs should be proposed by the Commission to businesses before the implementation of this Directive.

Removed:Recital 41 c (new): (41c) The digital package should be phased in as from 1 January 2025.