The EU has announced on 15 July 2020 a new Action Plan for fair and simple taxation. The Tax Action Plan is a set of 25 initiatives the European Commission will implement between now and 2024 to make tax “fairer, simpler and more adapted to modern technologies”. Full details of the ‘Tax Package” here.
The main areas may be summarised as:
- a single EU VAT registration to replace non-resident registrations to eliminate the need for non-resident VAT registrations. The registration number would enable a taxpayer to provide services and/or sell goods anywhere in the EU
- plans to complement existing national and international programmes on co-operative compliance including agreements with third-countries (including the UK post Brexit)
- reforms of VAT on Financial Services including measures for e-digital economy (Fintech) and financial and insurance outsourcing
- proposals to change Tour Operators Margin Scheme (TOMS) rules to simplify what is recognised as a complex and distortive VAT area
- platform economy; a review of the role of marketplaces in collecting VAT on behalf of individuals on their platforms
- simplification of the place of supply of passenger transport services (said to be for for greener taxation)
- advances in e-payment facilities for VAT for small and medium sized businesses
- extension of MOSS to all B2C sales across the EU (in addition to the proposals announced in respect of the 2021 extension for Distance Selling)
- measures to combat cross-border VAT fraud including improved analysis of EU level data and a move to automated VAT data sharing
- a reduction of the regulatory burden for e-commerce Distance Sales of goods subject to excise
- consideration of the treatment of crypto-assets and e-money which is considered a threat to tax transparency and which poses “substantial risks for tax evasion”
- proposals for reducing tax disputes and monitoring the effectiveness of the dispute resolution mechanisms in Member States
This list is not exhaustive and is a guide only.
The Commission says it aims “to lead the transition into a greener and more digital world that is compatible with the principles of our social market economy”. And that “Fair, efficient and sustainable taxation is central in delivering on those ambitions”. It added that this “will be even more important in the months and years ahead, as the EU and the global community seek to recover from the fallout of the COVID-19 crisis”.
Comment
How these intended changes impact the UK after Brexit remains to be seen, however, in an increasingly worldwide marketplace lead by technology, it is difficult to understand how the UK can live in isolation.
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