The Commission has welcomed the agreement reached by member states on detailed measures needed to simplify VAT rules for sales of goods online, also ensuring that online marketplaces play their part in the fight against tax fraud.
The new rules agreed today will ensure a smooth introduction of the new VAT measures for e-commerce agreed in December 2017 and which will come into force in January 2021. They should also help member states to recover the €5 billion in tax revenues lost in the sector each year - a figure due to rise to €7bn by 2020. EU economic and financial affairs ministers took the decision at their meeting in Brussels.
Economic and Financial Affairs, Taxation and Customs Union Commissioner Pierre Moscovici (pictured) said: “Step by step we are plugging the gaps through which tax revenues are lost, depriving EU countries of funds that could be used for public services and investment. At the same time we are bringing VAT rules into the 21st century, adapting them to an increasingly digital and globalized economy. Businesses should look forward to a smooth transition to the broader VAT system for e-commerce in 2021.”
Tackling VAT non-compliance on sales facilitated by online platforms
Non-EU companies, including those who make use of warehouses or so-called 'fulfilment centres' in the EU, can sell goods to EU consumers through online marketplaces. It can often be difficult for tax authorities to obtain the VAT due on those goods.
According to the measures agreed in December 2017, online marketplaces will be considered to act as the seller when they facilitate sales of goods with a value up to €150 to customers in the EU by non-EU businesses using their platform. Importantly, the same rules will apply when non-EU businesses use online platforms to sell goods from ‘fulfilment centres' in the EU, irrespective of their value, allowing tax authorities to claim the VAT due on those sales. Online platforms will also be expected to keep records of sales of goods or services made by businesses using the platform.
The rules agreed today specify in more detail when online marketplaces are considered to facilitate such supplies or when they are not considered to do so, based on whether or not they are setting the terms and conditions of the supply as well as their involvement in the payment or ordering and delivery of the goods. They also specify in detail what kind of records have to be kept by platforms facilitating supplies of goods or services to customers in the EU.
A new VAT system for online sellers
Implementing rules agreed today will also ensure that a brand new VAT system is ready for all businesses that sell goods online as of 2021. The rules introduce new building blocks for the system that will be needed for online companies to take full advantage of the EU's Single Market.
The updated electronic business portal for VAT or 'One-Stop Shop' put in place by these measures will allow companies that sell goods online to their customers to deal with their VAT obligations in the EU through one easy-to-use online portal in their own language.
Without the portal, VAT registration would be required in each EU member state into which they want to sell – a situation cited by companies as one of the biggest barriers for small businesses trading cross-border. The system is already in place for e-service providers since 2015 and is working well.
Final adoption of the new rules will be possible when the consultative opinion of the European Parliament becomes available. That said, the member states can rely on the rules adopted today to start extending their IT systems.
The new VAT rules will apply from 1 January 2021 with Member States having until the end of 2020 to transpose the new rules of the VAT Directive into national legislation. Businesses wishing to make use of the extended VAT One Stop Shop can start registering in member states as of 1 October 2020.
The measures follow up on the Commission's VAT Action Plan towards a single EU VAT area presented in April 2016.
The common Value Added Tax (VAT) system plays an important role in Europe's Single Market. VAT is a major and growing source of revenue in the EU, raising over €1 trillion in 2015, which corresponds to 7% of EU GDP. One of the EU's own resources is also based on VAT.
Belgian artist's 'portable oasis' creates COVID-free bubble for one
When governments around Europe told people to create a "bubble" to limit their social contacts during the COVID-19 pandemic, this was probably not what they had in mind, write Bart Biesemans and Clement Rossignol.
Alain Verschueren, a Belgian artist and social worker, has been strolling through the capital Brussels wearing a "portable oasis" - a plexiglass mini-greenhouse which rests on his shoulders, cocooning him in a bubble of air purified by the aromatic plants inside.
Verschueren, 61, developed the idea 15 years ago, inspired by the lush oases in Tunisia where he had previously worked. In a city where face coverings are mandatory to curb the spread of COVID-19, his invention has gained a new lease of life.
"It was about creating a bubble in which I could lock myself in, to cut myself off a world that I found too dull, too noisy or smelly," Verschueren said, adding that he has asthma and finds breathing within his contraption more comfortable than wearing a facemask.
Belgian artist Alain Verschueren wears his "Portable Oasis" while performing in a street, saying he wanted to be in his bubble in the middle of the city, amid the coronavirus disease (COVID-19) outbreak in Brussels, Belgium 16 April. REUTERS/Yves Herman
"As time went by, I noticed that people were coming up to me and talking to me. This isolation became much more a way of connecting," he said.
Onlookers in Brussels appeared amused and confused by the man wandering between the shops - mostly closed due to COVID-19 restrictions - encased in a pod of thyme, rosemary and lavender plants.
"Is it a greenhouse? Is it for the bees? Is it for the plants? We don't know, but it's a good idea," Charlie Elkiess, a retired jeweller, told Reuters.
Verschueren said he hoped to encourage people to take better care of the environment, to reduce the need to protect ourselves from air and noise pollution.
Indo-Pacific: Council adopts conclusions on EU strategy for co-operation
The Council approved conclusions on an EU strategy for cooperation in the Indo-Pacific, setting out the EU’s intention to reinforce its strategic focus, presence and actions in this region of prime strategic importance for EU interests. The aim is to contribute to regional stability, security, prosperity and sustainable development, at a time of rising challenges and tensions in the region.
The renewed EU commitment to the Indo-Pacific, a region spanning from the east coast of Africa to the Pacific island states, will have a long-term focus and will be based on upholding democracy, human rights, the rule of law and respect for international law.
Current dynamics in the Indo-Pacific have given rise to intense geopolitical competition adding to increasing tensions on trade and supply chains as well as in technological, political and security areas. Human rights are also being challenged. These developments increasingly threaten the stability and security of the region and beyond, directly impacting on the EU’s interests.
Consequently, the EU’s approach and engagement will look to foster a rules-based international order, a level playing field, as well as an open and fair environment for trade and investment, reciprocity, the strengthening of resilience, tackling climate change and supporting connectivity with the EU. Free and open maritime supply routes in full compliance with international law remain crucial. The EU will look to work together with its partners in the Indo-Pacific on these issues of common interest.
The EU will continue to develop partnerships in the areas of security and defence, including to address maritime security, malicious cyber activities, disinformation, emerging technologies, terrorism, and organized crime.
The EU and its regional partners will also work together in order to mitigate the economic and human effects of the COVID-19 pandemic and work towards ensuring an inclusive and sustainable socio-economic recovery.
The Council tasked the High Representative and the Commission with putting forward a Joint Communication on co-operation in the Indo-Pacific by September 2021.
The conclusions were adopted by the Council by written procedure.
Conference on the Future of Europe: Make your voice heard
Share your views on the EU, organize events across Europe and discuss with others through the new digital platform on the Conference on the Future of Europe, EU affairs.
Launched on 19 April, the platform is the multilingual hub of the Conference on the Future of Europe that will allow people to get involved and suggest what changes need to take place in the EU. Europeans will also be able to see what others propose, comment on them and endorse ideas.
The EU institutions have committed to listening to what people say and to following up on the recommendations made. The Conference is expected to reach conclusions by the spring of 2022.
How do you take part?
Choose a topic that interests you. It could be anything from climate change to digital issues or EU democracy. If you don’t see a category with your topic, share your opinion in the Other Ideas category.
Once you are in a specific category, you can read the introduction and explore some useful links. On the Ideas tab, you can share your views and find the ideas of others. Join the discussion by leaving a comment, or vote for ideas you like so that more people can find them.
You can submit your comment in any of the EU's official 24 languages. All comments can be translated automatically in any of the other languages.
Under the Events tab, you can explore events organised online or near you, register for an event or prepare your own.
The platform fully respects users’ privacy and EU data protection rules.
What happens when you submit an opinion?
The submitted opinions and the debate they initiate will be the basis for discussions in citizens’ panels that will be organised across the EU at regional, national and European level. These panels will include people from different backgrounds so that they can be representative of the whole population of the EU.
The conclusions of the different panels will be then presented at a plenary session of the Conference, which will bring together citizens, representatives of EU institutions and national parliaments.
Join the discussion on social media about the Conference with the hashtag #TheFutureIsYours.
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