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EU review of VAT reforms under French Presidency

As the six-month French Presidency of the Council of the EU ends, it reviews progress to date on a range of VAT measures

France took up the rotating Presidency role on 1 January 2022, and has provided an update on various EU VAT reforms. The main points included:

  • Implementation of the VAT e-commerce package – including work of improvements to the new IOSS reporting regime.
  • The VAT in the Digital Age reforms are progressing following the e-commerce package success. VAT Directive ammendments should be completed this Autumn.
  • Definitive VAT system – which is remains parked given member states concerns over the impact of requiring VAT to be charged for the first time on B2B intra-community supplies to tackle VAT fraud. Further analysis is underway, but this will not hinder the progress of other reforms
  • VAT rates reform – on 6 April 2022, member states ratified new reduced VAT rate setting freedoms. These must be adopted by member states before 1 January 2025.
  • Extra powers for VAT Committee – this would give comitology status to the Committee and enable it to enforce EU VAT rules more widely to reduce confusion and the backlog at the European Court of Justice on minor VAT rulings. Whist member states support this idea, they remain unsure of the shift of powers from the Council to the Commission and moving towards qualified majority voting. Other routes to improve the issues will be reviewed.
  • VAT reverse charge extension – in light of the lack of progress on the Definitive VAT System, the existing application of the optional reverse charge mechanism of fraud-prone goods and services has been extended to 31 December 2026.
  • VAT registration, collections and control procedures – this regular report on the efficiency of individual member states’ VAT compliance process was published in May 2022. If found many areas for improvement although praised Sweden and Finland.

EU VAT reforms

Reform (click for details) Update
2025 VAT registration thresholds equivalence foreign businesses On track
Virtual events VAT rule changes Agreed
2024 Payment providers' seller transaction reporting and bookkeeping obligations On track
Digital Reporting Requirements including EU e-invoicing harmonisation Implementation of VAT in the Digital Age?
2023 DAC 7 - marketplace reporting harmonisation On track
Financial Services VAT exemption reform proposals Consultation complete; proposal 2023
Tour operator margin scheme VAT reforms EC undertaking fresh review
2022 IOSS reforms to prevent double taxation Proposals early 2022
EU reduced VAT rate freedoms Enter into force 6 April 2022
VAT in the Digital Age proposals Published Dec 2022
Single VAT Registration in the EU - extension of OSS Published Dec 2022
Proposal for VAT treatment of the platform economy Published Dec 2022
EU DAC8 cryptocurrency tax reporting proposals Published Dec 2022
VAT Gap Initiative Q3 2022
EU definitive VAT system On hold
2021 One-Stop-Shop (OSS) single EU VAT return In effect since 1 July 2021
Ending €22 import VAT exemption; new IOSS return In effect since 1 July 2021
Marketplace deemed supplier EU VAT reforms In effect since 1 July 2021
2020 EU four Quick Fixes for VAT In effect
Tax authorities anti-VAT fraud cooperation In effect
Tax Action Plan - 25 VAT and other tax reforms roadmap See 'VAT in the Digital Age' and others
2019 Simplification of e-services VAT compliance and thresholds In effect
Single and multi-use vouchers In effect
2018 Lower e-book and publications VAT rates In effect, although not all EU states have adopted the option
EU Generalised Domestic Reverse Charge VAT Mechanism In effect, although no country has adopted this voluntary option
2015 B2C electronic services VAT reforms - MOSS return In effect

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