What changed

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

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

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

(Special legislative procedure – renewed consultation)

The European Parliament,

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

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

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

– having regard to its position of 22 November 2023,

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

– 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),

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

1. Approves the Commission proposal as amended;

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

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;

1. Approves the Council draft;

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

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

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

Amendment 1

Proposal for a directive

Recital 1 a (new)

Or. en

Amendment 2

Proposal for a directive

Recital 1 b (new)

Or. en

Amendment 3

Proposal for a directive

Recital 1 c (new)

Or. en

Amendment 4

Proposal for a directive

Recital 2 a (new)

Or. en

Amendment 5

Proposal for a directive

Recital 3 a (new)

Or. en

Amendment 6

Proposal for a directive

Recital 3 b (new)

Or. en

Amendment 7

Proposal for a directive

Recital 3 c (new)

Or. en

Amendment 8

Proposal for a directive

Recital 4

Or. en

Amendment 9

Proposal for a directive

Recital 4 a (new)

Or. en

Amendment 10

Proposal for a directive

Recital 6

Or. en

Amendment 11

Proposal for a directive

Recital 6 a (new)

Or. en

Amendment 12

Proposal for a directive

Recital 7

Or. en

Amendment 13

Proposal for a directive

Recital 10 a (new)

Or. en

Amendment 14

Proposal for a directive

Recital 12

Or. en

Amendment 15

Proposal for a directive

Recital 13

Or. en

Justification

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.

Amendment 16

Proposal for a directive

Recital 16 a (new)

Or. en

Amendment 17

Proposal for a directive

Recital 16 b (new)

Or. en

Amendment 18

Proposal for a directive

Recital 16 c (new)

Or. en

Amendment 19

Proposal for a directive

Recital 17

Or. en

Amendment 20

Proposal for a directive

Recital 18 a (new)

Or. en

Justification

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

Amendment 21

Proposal for a directive

Recital 19

Or. en

Amendment 22

Proposal for a directive

Recital 20 a (new)

Or. en

Amendment 23

Proposal for a directive

Recital 23

Or. en

Amendment 24

Proposal for a directive

Recital 23 a (new)

Or. en

Amendment 25

Proposal for a directive

Recital 23 b (new)

Or. en

Amendment 26

Proposal for a directive

Recital 23 c (new)

Or. en

Amendment 27

Proposal for a directive

Recital 24

Or. en

Amendment 28

Proposal for a directive

Recital 27 a (new)

Or. en

Amendment 29

Proposal for a directive

Recital 31 a (new)

Or. en

Amendment 30

Proposal for a directive

Recital 31 b (new)

Or. en

Amendment 31

Proposal for a directive

Recital 32

Or. en

Amendment 32

Proposal for a directive

Recital 35 a (new)

Or. en

Amendment 33

Proposal for a directive

Recital 36

Or. en

Amendment 34

Proposal for a directive

Recital 38

Or. en

Amendment 35

Proposal for a directive

Recital 39 a (new)

Or. en

Justification

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.

Amendment 36

Proposal for a directive

Recital 41 a (new)

Or. en

Amendment 37

Proposal for a directive

Recital 41 b (new)

Or. en

Amendment 38

Proposal for a directive

Recital 41 c (new)

Or. en

Amendment 39

Proposal for a directive

Recital 41 d (new)

Or. en

Amendment 40

Proposal for a directive

Article 1 – title

Or. en

Amendment 41

Proposal for a directive

Article 1 – paragraph 1 – point 6

Directive 2006/112/EC

Article 217 – paragraph 1 a (new)

Or. en

Justification

pdf invoice with electronic signature is a common and well accepted business practice for supplier and customers, in particular for SMEs and VSEs.

Amendment 42

Proposal for a directive

Article 1 – paragraph 1 – point 7

Directive 2006/112/EC

Article 218 – paragraph 1 a (new)

Or. en

Justification

The definition of an electronic invoice also includes documents created, transmitted and received by electronic means which do not certain contain certain data in a structured electronic format but, for exemple, in the form of graphics.

Amendment 43

Proposal for a directive

Article 1 – paragraph 1 – point 7

Directive 2006/112/EC

Article 218 – paragraph 2 a (new)

Or. en

Justification

Making it easier for businesses and avoiding errors.

Amendment 44

Proposal for a directive

Article 1 – paragraph 1 – point 7

Directive 2006/112/EC

Article 218 – paragraph 2 b (new)

Or. en

Justification

Directive 2014/55/EU is long and complex (over 150 pages). Risks for SMEs, VSEs and Not-for-Profit bodies of having to use a third party service provider to issue. This adds costs, makes the process complex and harms the competitiveness of the EU businesses.

Amendment 45

Proposal for a directive

Article 1 – paragraph 1 – point 7

Directive 2006/112/EC

Article 218 – paragraph 2 c (new)

Or. en

Justification

Prior to the implementation of the EU DRR (01.1.2028), it should be standardized, for the transitional period, that Member State can only impose the obligation to e-issue, transmit and receive e-invoices on taxable person who are either established in the territory of that Member State or have fixed establishment there.

Amendment 46

Proposal for a directive

Article 1 – paragraph 1 – point 9

Directive 2006/112/EC

Article 232

Or. en

Amendment 47

Proposal for a directive

Article 1 – paragraph 1 – point 9

Directive 2006/112/EC

Article 232 – paragraph 1

Or. en

Amendment 48

Proposal for a directive

Article 2 – title

Or. en

Amendment 49

Proposal for a directive

Article 2 – paragraph 1 – point 2 – point a

Directive 2006/112/EC

Article 14a – paragraph 2

Or. en

Justification

Good faith applies to all phases of the contract.

Amendment 50

Proposal for a directive

Article 2 – paragraph 1 – point 2 – point b – introductory part

Or. en

Amendment 51

Proposal for a directive

Article 2 – paragraph 1 – point 2 – point b

Directive 2006/112/EC

Article 14a – paragraph 3

Or. en

Justification

Good faith applies to all phases of the contract

Amendment 52

Proposal for a directive

Article 2 – paragraph 1 – point 2 – point b

Directive 2006/112/EC

Article 14a – paragraph 4

Or. en

Justification

Good faith applies all phases of the contract.

Amendment 53

Proposal for a directive

Article 2 – paragraph 1 – point 2 – point b

Directive 2006/112/EC

Article 14a – paragraph 4 a (new)

Or. en

Justification

The principle of VAT neutrality could be compromised because the underlying suppliers services would be subject to VAT, but the suppliers would not be able to deduct input on the costs related to these services.

Amendment 54

Proposal for a directive

Article 2 – paragraph 1 – point 2 – point b

Directive 2006/112/EC

Article 14a – paragraph 4 b (new)

Or. en

Justification

Evaluate the effectiveness of the measures adopted with a view making adjustments to the text of the Directive if necessary. The new system has not passed any tax audits in practice. Neither the tax authorities, nor the platforms have any practical experience with this new set of rules and the resulting changes in data collection, storage or accountability.

Amendment 55

Proposal for a directive

Article 2 – paragraph 1 – point 3

Directive 2006/112/EC

Article 28a – paragraph 1 a (new)

Or. en

Justification

The introduction of the Deemed Supplier Regime (DSR) will impose disproportionate burdens and compliance costs on small and medium-sized travel agencies providing short-term accommodation. In addition, the principle of non-discrimination is not respected as hotels can claim an input credit while the underlying supplier, if they are not a taxable person, cannot claim on input credit.

Amendment 56

Proposal for a directive

Article 2 – paragraph 1 – point 4

Or. en

Justification

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 elements eligible for inclusion in the purchase price may differ from on country to another.In addition the environmental objectives commend to re-use of goods and the circulation of second-hand googs. Creating more tax and administrative burdens will be a brake on cross-border trade of such goods.

Amendment 57

Proposal for a directive

Article 2 – paragraph 1 – point 7

Directive 2006/112/EC

Article 135 – paragrah 3

Or. en

Justification

A rental duration of 45 days is not usual. Few hotel stays have durations of 45 days or more.

Amendment 58

Proposal for a directive

Article 2 – paragraph 1 – point 10

Directive 2006/112/EC

Article 143 – paragraph 1a – subparagraph 1

Or. en

Justification

Close cooperation and information sharing between EP, EPPO, Eurofisc, Europol , OLAF, Eurojust leads to better coordination in combatting VAT fraud and identifying new fraudulent practices.

Amendment 59

Proposal for a directive

Article 2 – paragraph 1 – point 12

Directive 2006/112/EC

Article 194 – paragraph 1 a (new)

Or. en

Justification

The exercise of the reverse charge mechanism option under Article 194 paragraph 1 must take place in the Directive itself or in VAT Regulation (Regulation 282/2011), otherwise there is a risk of a new fragmentation of the European legal framework in VAT taxation, which is particularly worrying in view of the inclusion of these services in the Digital Reporting Requirements.

Amendment 60

Proposal for a directive

Article 2 – paragraph 1 – point 12

Directive 2006/112/EC

Article 194 – paragraph 1 b (new)

Or. en

Justification

In order to preserve neutrality, the reserve charge for supplies by non-established taxable persons remains optional for supplying businesses. The amendment clarifies the directive.

Amendment 61

Proposal for a directive

Article 2 – paragraph 1 – point 14 – point b

Directive 2006/112/EC

Article 242a – paragraph 2 – subparagraph 2

Or. en

Justification

Clarifying the text

Amendment 62

Proposal for a directive

Article 2 – paragraph 1 – point 27

Directive 2006/112/EC

Article 369xa – paragraph 1 – point 1

Or. en

Justification

There is a risk of new compliance costs due to the fragmentation of the legal framework, since the definition of "capital goods" under 189(a) is placed in the hand of the individual Member States.

Amendment 63

Proposal for a directive

Article 3 – title

Or. en

Amendment 64

Proposal for a directive

Article 4 – title

Or. en

Amendment 65

Proposal for a directive

Article 4 – paragraph 1 – point 2

Directive 2006/112/EC

Article 138 – paragraph 1a.

Or. en

Justification

The failure to report the transaction in the EU sales list/and thus, for the future, failure to transmit the e-invoice within the deadline, would lead potentially to fines or penalties, but not rejecting the VAT exemption right, adding extra cost to the supplier.

Amendment 66

Proposal for a directive

Article 4 – paragraph 1 – point 4

Directive 2006/112/EC

Article 222 – paragraph 1

Or. en

Justification

The deadline for issuing electronic invoices (2 days) is unrealistic. Items such as long chains of transactions, transshipment, temporary storage in terminals, consignment stock,..., may cause delays in issuing invoice until the delivery has reached an agreed location. Furthermore, "working days" vary from Member State to Member State. In order for Article 222 VAT Directive to be implementable in practice at all, a clear definition of the occurrence of chargeable event" in the VAT Directive is required.

Amendment 67

Proposal for a directive

Article 4 – paragraph 1 – point 4

Directive 2006/112/EC

Article 222 – paragraph 1 a (new)

Or. en

Justification

This approach gives small businesses more time to match invoices and at the same time covers employee vacation periods during which verification and approval of invoices may not be possible within the proposed 2 days timeframe.

Amendment 68

Proposal for a directive

Article 4 – paragraph 1 – point 4

Directive 2006/112/EC

Article 222 – paragraph 1 b (new)

Or. en

Justification

The EC should make recommendations in this respect in order to compensate for invoicing and reporting obligations.

Amendment 69

Proposal for a directive

Article 4 – paragraph 1 – point 4

Directive 2006/112/EC

Article 222 – paragraph 1 c (new)

Or. en

Justification

Member States tax administrations would have a wide access to sensitive information relating to defence and national security, which would undermine the confidentiality clauses in these types of contracts.

Amendment 70

Proposal for a directive

Article 4 – paragraph 1 – point 5

Or. en

Justification

The summery invoices allow suppliers and customers to better manage their cash flow. Such a deletion would cause considerable damage and cost as well as an unnecessary increase in the administrative burden for companies and a significant environmental impact.

Amendment 71

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive 2006/112/EC

Article 226 – paragraph 1 – point 16

Or. en

Justification

codification of the practice.

Amendment 72

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive 2006/112/EC

Article 226 – paragraph 1 – point 17

Or. en

Justification

The requirement to produce an IBAN number is not required when the supplier uses alternative payment methods such as the B2B clearing system.

Amendment 73

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive 2006/112/EC

Article 226 – paragraph 1 – point 18

Or. en

Justification

This obligation is not relevant and creates administrative burdens and difficulties in the event of non-payment or when the payment date is different from the purchase date (e.g. intra-group transactions that no give rise to payment, barter exchanges and where there are payments in installments) because there would be no obligation for customers to pay an invoice through a bank transaction. In addition, this proposal would be particularly burdensome for small businesses established in countries.

Amendment 74

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive 2006/112/EC

Article 226 – paragraph 1 – 18 b (new)

Or. en

Justification

Consistency between texts

Amendment 75

Proposal for a directive

Article 4 – paragraph 1 – point 9 – point a

Directive 2006/112/EC

Article 262– paragraph 1 – introductory part

Or. en

Justification

Honest business will probably issue invoices as early as possible. However, the missing traders can wait until the last moment to issue invoices that will be communicated the 17th of the month of the transaction.

Amendment 76

Proposal for a directive

Article 4 – paragraph 1 – point 10

Directive 2006/112/EC

Article 263 – paragraph 1 – subparagraph 1

Or. en

Justification

The reporting deadline (2 days) implies that invoices must be reported bases on when they are received. This runs counter to business natural systems and processes, which, as a matter of essential governance and financial control, require that incoming invoices are reviewed before being booked. Failure to do so risks putting businesses in a position where it is impossible to comply without abandoning normal commercial controls and potentially exposing business to regular penalties for incorrect filing.

Amendment 77

Proposal for a directive

Article 4 – paragraph 1 – point 10

Directive 2006/112/EC

Article 263 – paragraph 2 a (new)

Or. en

Justification

Member States tax administrations would have wide access to sensitive information relating to defence and national security, which would undermine the confidentiality clauses in these types of contracts.

Amendment 78

Proposal for a directive

Article 4 – paragraph 1 – point 17

Directive 2006/112/EC

Article 271b – paragraph 1

Or. en

Justification

Clarifying text

Amendment 79

Proposal for a directive

Article 4 – paragraph 1 – point 17

Directive 2006/112/EC

Article 271b – paragraph 2

Or. en

Justification

It is legally not possible to impose e-invoicing transactions with non-EU operators and it may not be legally possible in a number of Member States in respect of B2C transactions.

Amendment 80

Proposal for a directive

Article 4 – paragraph 1 – point 17

Directive 2006/112/EC

Article 271c – paragraph 1

Or. en

Justification

It is necessary to have an assessment taking into account the real life of businesses.

Amendment 81

Proposal for a directive

Article 4 – paragraph 1 – point 18

Directive 2006/112/EC

Article 273 – paragraph 1

Or. en

Justification

Recall that the Directive must be balanced.

Amendment 82

Proposal for a directive

Article 5 – paragraph 1 – subparagraph 2

Or. en

Justification

Delay too tight.

Amendment 83

Proposal for a directive

Article 5 – paragraph 2 – subparagraph 1

Or. en

Amendment 84

Proposal for a directive

Article 5 – paragraph 2 – subparagraph 2

Or. en

Amendment 85

Proposal for a directive

Article 5 – paragraph 3 – subparagraph 1

Or. en

Amendment 86

Proposal for a directive

Article 5 – paragraph 3 – subparagraph 2

Or. en

Amendment 87

Proposal for a directive

Article 5 – paragraph 4 – subparagraph 2

Or. en

EXPLANATORY STATEMENT

The European Commission proposed on December 8, 2022 a package of new measures updating the VAT Directive (2006/112/EC), the Council Implementing Regulation (EU) 282/2011 and the Council Regulation on administrative cooperation (EU 904/2010) to adapt to new digital business models and to allow the full use of data generated by digitization.

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

These proposed directive and regulations are expected to enter into force gradually between January 2024 and January 2028. Your rapporteur believes that these deadlines should, given the delay in the legislative process, be postponed by at least one year overall.

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

With these measures, the Commission hopes to reduce the VAT gap, better combat VAT fraud, ensure the proper functioning of the internal market and put an end to distortions of competition.

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

In this respect, your rapporteur stresses the need to respect the principle of proportionality between the objective of combating fraud and the difficulties that might arise in applying the proposed rules to the real life of businesses. The fight against fraud must not be to the detriment of the majority of businesses that work in transparency and good faith.

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

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With the switch to real-time digital declaration based on electronic invoicing, stricter conditions will be imposed on companies carrying out intra-European transactions for all B2B deliveries of goods and services in the name of the fight against fraud.

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

Your rapporteur underlines the additional burdens that the implementation of this system will create for businesses. He recalls that the impact assessment states “Businesses will bear the costs of the additional administrative burden arising from the introduction of real-time digital declaration. This burden will be higher for micro and small enterprises”. Therefore, your rapporteur believes that these measures should be accompanied by incentives for businesses to encourage the optimal implementation of VAT in the Digital Age.

ii) update VAT rules for the platform economy and

Your rapporteur believes that the two working day deadline for issuing and declaring invoices is not realistic for businesses, especially SMEs, and should be reviewed to a ten working days basis. Similarly, the deletion of the possibility of issuing summary invoices runs counter to the principles of flexibility and simplicity that govern this proposal.

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

Your rapporteur stresses that the proposals must be simple, effective and balanced for all parties concerned, in particular for SMEs, VSEs and Not-profit-bodies.

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.

As regards the updating of the VAT rules applicable to passenger transport and short-term accommodation platforms, justified by the emergence of new business models, your rapporteur recalls that these new measures must be clear, non-discriminatory and neutral. He believes that the liability of the "presumed supplier/provider" instead of the "underlying provider" could increase the final price for the consumer.

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.

Finally, your rapporteur considers that the Single registration is one of the improvements most appreciated by EU companies, especially SMEs, which have a real need for simplification of intra-EU declaration procedures. Nevertheless, your rapporteur is concerned that the mandatory reverse charge will lead to an increase in VAT fraud and proposes that an independent study must be carried out on the reduction of VAT fraud in case of taxation of intra-Community supplies of goods and services.

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

Furthermore, the inclusion of second-hand goods in the UOSS system could be problematic because it is not possible for a marketplace to know the margin made by a third-party seller.

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.

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.

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.

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