What changed

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

SPECIAL LEGISLATIVE procedure

Follow up to the European Parliament legislative resolution on the draftproposal for a Council directive amending Directive 2006/112/EC as regards VAT rules for the digital age and to the legislative resolution on the proposal for a Council regulation amending Regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age

(15159/2024 – C100170/2024 – 2022/0407(CNS))

1. Rapporteur: Olivier CHASTEL (Renew / BE)

(Special legislative procedure – renewed consultation)

2. Reference numbers: 2022/0407 (CNS) / A9-0327/2023 / P9_TA(2023)0421; 2022/0409 (CNS) / A9-0324/2023 / P9_TA(2023)0422

The European Parliament,

3. Date of adoption of the resolution: 22 November 2023

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

4. Legal basis: Article 113 of the Treaty on the Functioning of the European Union

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

5. Competent Parliamentary Committee: Committee on Economic and Monetary affairs (ECON)

– having regard to its position of 22 November 2023,

6. Commission's position: accepts some amendments.

– 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),

Part I General points

– having regard to Rule 84 and 86 of its Rules of Procedure,

Topic 1 – On the proportionality of the measures, and the impact on data protection

– having regard to the report of the Committee on Economic and Monetary Affairs (A10-0001/2025),

Amendments 1, 2, 3, 4, 5, 10, 13, 22, 29 and 50 of the resolution on the directive, and amendments 13, 14 and 24 of the resolution on the regulation call for amendments specifically referring in the text of the proposals to the need to respect the principle of proportionality and the rules regarding data protection.

1. Approves the Council draft;

Commission position: accept the spirit of the amendments but reject the amendments as such.

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

The Commission agrees that issues of proportionality and the rules regarding data protection are extremely important when considering legislative proposals, and in drafting the legislation, the Commission has already considered carefully the proportionality of the measures in the package, in particular during the process of drafting the accompanying impact assessment. In addition, the Commission has consulted the EU Data Protection Supervisor (EDPS) prior to the adoption of its proposal and ensured the measures’ compliance with their guidelines. The opinion of EDPS is positive on the proposal in that it notably complies with the principle of data minimisation. Therefore, whilst the Commission agrees with the spirit of the European Parliament’s recommendations, this issue is already covered in the proposal.

3. Asks the Council to consult Parliament again if it intends to amend its draft substantially;

Topic 2 – Amendments related to incentives, guidance or technical support to be provided by the Commission and Member States in the implementation phase

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

Amendments 35, 57, 64, 86 of the resolution on the directive, and amendments 12 and 46 of the resolution on the regulation call on the Commission to provide incentives to small platforms to comply with the rules (Platform), to publish the EU standard on electronic invoicing (Directive 2014/55/EU of the European Parliament and of the Council of 16 April 2014 on electronic invoicing in public procurement (OJ L 133, 6.5.2014, p. 1)) on its website (Digital Reporting Requirements DRR); to give support to Member States in the development of their national systems (DRR); to develop software for businesses to report to tax administrations (DRR); to provide ‘practical solutions’ to reduce the costs of implementation (DRR), and for Member States to provide guidance to small businesses who would wish to register for VAT (Platforms).

EXPLANATORY STATEMENT

Commission position: accept the spirit of the amendments but reject the amendments as such.

On 8 December 2022, the Commission presented the ‘VAT in the digital age’ package (ViDA), which consists of three proposals:

The Commission understands that these are new and somehow complex measures, the implementation of which would require guidance and technical support for both businesses and Member States. The EU standard on electronic invoicing is already published on the Commission’s website, and the Commission is already committed to assisting the Member States in the development of their national systems. However, the development of the software for businesses to report to national systems needs to be developed by the Member States themselves in order for the systems to be compatible with the Member States’ legacy systems already in place. The Commission will provide detailed explanatory notes following the adoption of the measures, which will give further information and guidance for businesses and Member States on their practical application. It should be noted that the VAT in the Digital Age (ViDA) package brings significant simplification and reduction of costs for small and medium sized enterprises (SMEs), notably in terms of reporting requirements.

 a proposal for a Council directive amending directive 2006/112/EC as regards VAT rules for the digital age;

Topic 3 – On the sharing of central VAT Information Exchange System (VIES) data with OLAF, EPPO and Europol

 a proposal for a Council regulation amending regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age

Amendment 26 in the resolution on the directive, and amendments 5, 7, 15-17, 27, 29, 31-33, 54-56, 58 in the resolution on the regulation call for the sharing of VIES data with the EPPO, OLAF and EUROPOL in order to help those agencies combat fraud.

 a proposal for a Council implementing regulation amending implementing regulation (EU) No 282/2011 as regards information requirements for certain VAT schemes.

Commission position: accept the spirit of the amendments but reject the amendments as such.

The package developed an action plan for fair and simple taxation that emphasized the need to reflect on how technology can be used in the fight against tax fraud and how the current VAT rules in the European Union could be adapted for doing business in the digital age. The three changes to make VAT fit for the digital age are

The granting of other bodies access to central VIES data will be subject to a specific Commission proposal in 2024 that will cover in depth the cooperation of Member States with other entities for the fight against VAT fraud. Therefore, it is not appropriate to have such measures in this proposal, which would be also premature given that the establishment of the central VIES has not yet been agreed. The dedicated proposal will address the issue more broadly and will include solutions that will take effect before the development of the central VIES. In particular, it will include an improvement of the current framework of cooperation of Eurofisc with OLAF and Europol on the one hand, and the inclusion of the EPPO in the Regulation 904/2010 to strengthen its access to VAT information at EU level on the other hand. In all cases, the information shared through this new framework would include information from VIES relevant for the exercise of the competences of the referred bodies while the direct access to central VIES for all of them may raise critical issues in terms of proportionality. The Commission, after analysis of the impacts including on the right to the protection of personal data, can ensure that the processing of personal data under the proposal is limited to what is necessary and proportionate.

i) a new real time digital reporting system based on e-invoicing,

Topic 4 – The Commission should carry out studies on the effective implementation of various elements of the proposal

ii) update VAT rules for the platform economy and

Amendments 30, 65, 76 and 109 of the resolution on the directive call for the Commission to carry out studies on the effectiveness of the deemed supplier measure, on the impact of Article 194 on the Missing Trader Intra-Community (MTIC) fraud, and insert a review clause for the One Stop Shop.

iii) a single vat registration for businesses selling to consumers across the EU.

Commission position: accept the amendments.

The directive and the regulation were subject to a special legislative procedure. The European Parliament was consulted and delivered its opinion on 22 November 2023.

The Commission can agree that a review of the measures of the package is a sensible approach and will commit to proposing to Council the inclusion of a mid-term review.

On 5 November 2024, the Council agreed on the ViDA package. However, given the substantial differences between the Commission’s proposal (i.e. the Directive) on which the European Parliament was initially consulted and the text of the Council, the Council decided on 7 November 2024 to re-consult the European Parliament.

Topic 5 – On the timing of implementation of the Proposal

The deemed supplier regime was a significant point of contention within the Council, making it particularly challenging to reach a final compromise.

Amendments 49, 53, 60, 61, 82 and 103-108 in the resolution on the directive and amendments 28, 41, 62 and 63 in the resolution on the regulation call for the delayed implementation of various elements of the measures.

The Council decided that the deemed supplier rules will be introduced first on a voluntary basis as from July 1, 2028, and then mandatory as from January 1, 2030. Member States will also be authorised to exempt SMEs from the deemed supplier regime without having to report to the VAT committee. In its first opinion, the EP highlighted the need to limit the administrative burden for SMEs.

Commission position: accept the spirit of the amendments but reject the amendments as such.

The Council also introduced more flexibility for Member States to operate their own invoicing systems as many member states have already invested heavily in their own software. Summary invoices are also reintroduced under certain conditions despite the Commission’s proposal to prohibit them. The Parliament also favoured the reintroduction of summary invoices in order to keep flexibility and simplicity for Member States and businesses.

The Commission recognises and agrees with the European Parliament that the timing of the implementation of the measures is an important element, as there must be sufficient time for both business and Member States to properly and carefully implement the necessary changes. This is why, when negotiations on the implementation dates take place in Council (towards the end of the negotiations), the Commission will support a realistic and necessary timeframe for implementation. However, the Commission cannot support a gradual implementation which is dependent on the size of business as the changes impact altogether taxable persons that are interrelated. This would in any case be too complex for businesses and tax administrations to implement. However, in the implementation of certain measures, Member States will still be allowed to make a distinction (e.g. they can impose a digital reporting requirement to certain businesses only, they can allow for the issuance of paper invoices provided that they are not implementing a digital reporting requirement).

On the implementation deadlines, the Parliament opinion suggested longer deadlines than in the Commission proposal. The Council even further extents the deadlines beyond the Parliament’s proposals.

Topic 6 – Information regarding Implementing Acts to be shared with European Parliament.

Therefore, the rapporteur is of the view that a simplified procedure without amendments is the relevant procedure.

Amendment 73 in the resolution on the directive and amendments 16, 40, 45, 48, 59-61 in the resolution on the regulation call for the Commission to inform the European Parliament of draft implementing acts in relation to the measures.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

Commission position: accept the spirit of the amendments but reject the amendments as such.

The rapporteur declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

The Commission agrees that the European Parliament has a right to exercise its rights of scrutiny of the Commission under Comitology Regulation 182/2011 and note that the European Parliament is already kept informed during the preparation of implementing acts in accordance with that regulation. Therefore, it would be inappropriate to explicitly say this in the legal text.

PROCEDURE – COMMITTEE RESPONSIBLE

Topic 7 – On the link between this proposal and the definitive regime

Amendments 6, 7, 9 and 11 of the resolution on the directive make a link in the recitals between this proposal and the definitive VAT regime, making reference to the evolution of the VAT gap and the structure of Missing Trader Intra-Community fraud.

Commission position: reject the amendments.

The ViDA initiative does not replace the definitive VAT regime, and it is not within the remit of this proposal to refer to the definitive regime and how it may impact the current VAT system.

Topic 8 – Amendments relating to the storage of data

Amendments 24, 78 of the resolution on the directive, and amendment 30 of the resolution on the regulation ask that information collected should not be stored outside the EU, either by the Member States, the businesses, or third parties.

Commission position: reject the amendments.

It should be recalled that EU Member States, businesses and third parties are bound by existing data protection rules, including when transferring (and storing) data outside the EU. The EU’s data protection rules do not require personal data to be stored in the EU, but instead allow it to be transferred outside the EU as long as continuity of protection is ensured (e.g. by putting in place data protection safeguards by means of a contract or arrangement). Moreover, also from the perspective of trade, businesses should be free to choose whether to store the data themselves or have it stored by third parties and should be free to choose where data will be stored in accordance with their business processes and practices, in full respect of the Union data protection rules.

Part II – Amendments specifically relating to Digital Reporting Requirements (DRR)

Topic 9 – Amendments relating to the content and timing of invoices.

Amendments 85 and 89-94 of the resolution on the directive concern the timing and content of invoices. They include an amendment changing the timing of the date of issuance of invoices, changes to the treatment of corrective invoices, removing the necessity to include IBAN (where available) and the date of payment on invoices, and a change of the date from which businesses have 3 days to send the data (from date of issuance of invoice to date they are posted in the accounts).

Commission position: accept the spirit of the amendments but reject the amendments as such.

The content of invoices has been considered carefully in order for Member States to have sufficient information necessary to fight fraud, whilst not putting too high a burden on businesses. The timings of when an invoice is issued and when the data is transmitted aim to allow for as real-time reporting as possible. Nevertheless, this element is still under discussion in Council where Member States are considering allowing more time for the issuance of invoices.

Topic 10 – The use of summary invoices

Amendments 19 and 88 in the resolution on the directive aims to reintroduce the use of summary invoices.

Commission position: accept the amendments.

The Commission proposed abolishing the use of summary invoices on the reasoning that this would not be necessary alongside real-time reporting. However, the debate in Council has shown that it would be beneficial for businesses to continue allowing for the option of summary invoices. Whilst it is still to be decided by Member States, the Commission should support the re-introduction of this measure.

Topic 11 – Alterations to the scope and operation of the DRR measure

Amendments 25, 54, 56, 58 in the resolution on the directive aim to restrict the scope of the measure – namely to remove the interdiction on pre-authorisation; to restrict the definition of e-invoicing to intra-EU cross-border sales; to restrict Member States’ abilities to introduce e-invoicing from the date of entry into force of the directive; allowing Member States to ask for data not drawn from e-invoices for certain transactions, and not applying the DRR measures to defence related supplies.

Commission position: reject the amendments.

The amendments alter the scope and operation of the DRR measure, adding complexity for businesses and Member States, with no corresponding increase in effectiveness. For example, to have a definition of e-invoicing which only applies to intra-EU sales and not domestic supplies would lead to a situation in which a business may be required to have at least two separate invoicing systems, one for domestic trade and one for cross-border trade. Further, it is not proposed to have sectoral exclusions, as they would further complicate the operation of the measure.

Part III – Amendments specifically relating to platforms

Topic 12 – Clarification of the scope of the measure

Amendments 66 and 77 in the resolution on the directive clarify that the deemed supplier regime applies to passenger transport ‘within the Union’.

Commission position: accept the amendments.

This is a necessary clarification which is also supported by the Council.

Topic 13 – Restrictions of the scope of the deemed supplier measure and its application

Amendments 36, 37, 68, 71 and 72 in the resolution on the directive aim to restrict the scope of the measure by not applying it to SMEs and any supply which would otherwise be exempt. In addition, the resolution asks for the deletion of the provision harmonising the treatment of the facilitation service and for the introduction of the concept of ancillary services when defining short-term accommodation rental.

Commission position: reject the amendments.

The European Parliament has recommended excluding from the scope of the deemed supplier measure any supply of short-term accommodation rental or passenger transport which would be exempt if it had not been supplied via a platform. Restricting the scope of the deemed supplier measure in such a way would defeat the main aim of the proposal, that of harmonising the treatment of the largely untaxed platform economy and the traditional, largely taxed economy in these sectors. In taxing these supplies however, the proposal does not put the burden of taxation on the underlying supplier, but on the platforms, which are better equipped to comply with the corresponding VAT obligations. It should be noted that platforms themselves which are exempt under the SME scheme are already excluded from the deemed supplier measure, and this is already clarified in the proposal. The amendments concerning the facilitation service and the definition of short-term accommodation rental would cancel the harmonisation the proposal seeks to achieve.

Part IV – Amendments specifically relating to Single VAT Registration (SVR)

Topic 14 – Changes to the scope of the measure

Amendments 38-40 and 79-81 of the resolution on the Directive call for changes on the scope of the measure. In particular, relating to the definition of a transfer of own goods; the conditions for exclusion from the transfer of own goods scheme and the stipulation that the return can be made out in the national currency.

Commission position: accept the spirit of the amendments but reject the amendments as such.

Regarding the definition of transfers of own goods, the latest Council compromise text extends the scope of the new transfer of own goods scheme to capital goods but still excludes transfers of goods without a full right of deduction. The Commission can support this text as it captures a broader range of goods while not opening issues linked to the partial deductibility. The suggestion to remove the exclusion condition from this scheme when the activity of the taxpayer has ceased cannot be accepted, as it mirrors the conditions applied in the other One Stop Shop (OSS) schemes and in any event does not prevent the taxable person to re-register in those schemes when their activities resume. Finally, the text already allows for the return to be made out in currencies other than the Euro.

Topic 15 – Timing of the information to be shared between Member States

Amendments 34, 35, 36 and 39 of the resolution on the regulation change the deadlines for various information to be transmitted between Member States for the OSS scheme.

Commission position: reject the amendments.

These timings are already in application for all OSS schemes and should not be reviewed as they ensure proper and quick exchange of information between the Member States. Any changes, if needed, would have to be decided by Member States on the basis of their capabilities and resources.

Part V – amendments specifically relating to Administrative Cooperation

Topic 16 – That central VIES shall guarantee data protection.

Amendments 43, 50-53 and 57 of the resolution on the regulation call for the use of technology to guarantee the protection of data and that there is a secure, resilient and reliable infrastructure.

Commission position: accept the spirit of the amendments but reject the amendments as such.

The responsibilities regarding the VIES system already exist (in Article 24m), and the security requirements are already set in Article 55 of the regulation. The security measures will be specified during the implementation phase. Therefore, it is not necessary to repeat the need for a secure and resilient system throughout the main act.