The European Council, acting unanimously on a proposal from the European Commission may authorise any Member State to apply special measures for derogation from the provisions of the EU VAT Directive. This is only justified when it is in order to simplify the procedure for collecting VAT or to prevent certain forms of tax evasion or avoidance.
Tag - European Union
On October 24th the Organisation for Economic Cooperation and Development (OECD) announced the release of new implementation guidance to promote the effective collection of consumption taxes on cross-border sales.
Further to our article on 11th October we can bring you an update on the debate surrounding the implementation of new legislation to tax digital companies such as Amazon and Google within the EU.
At the recent EU summit in Brussels on October 19th the drive to force the internet giants to pay more tax, through being taxed on revenue rather than profit, is losing momentum.
It was agreed on the 12th October that the EPPO, whose central office will be based in Luxembourg, will be in charge of investigating and prosecuting offenders of EU fraud.
"The creation of the European Public Prosecutor's Office is an important step in European justice cooperation, which will help to protect our taxpayers money.
On October 4th 2017 the European Commission announced an overhaul of the current European VAT system. The long-term plan that could take effect on January 1st 2022 includes the introduction of a ‘single European VAT area’. A formal proposal is expected in 2018 but unanimous agreement from all Member States in the Council will be required before the proposal can enter into force.
At least 10 countries within the EU are pushing to find a formula to increase taxes on corporate tech giants like Google, Facebook and Apple.
Spearheaded by France's Emmanuel Macron, and with the backing of countries like Germany, Italy and Spain, all of whom are keen to see change in legislation whereby companies move to low tax jurisdictions countries like Ireland or Luxembourg just to avoid high taxation.
A study conducted by the European Commission in 2015 has estimated that a total of €152 billion in uncollected Value-Added Tax (VAT) revenues slipped through the net.
Termed the 'VAT Gap', being the overall difference between the expected VAT revenue and the amount actually collected, highlights the need for serious intervention from the EC so that Member States can utilize these VAT revenues for their budgets.
With the European Union planning to increase taxes on digital firms, several U.S. companies have expressed concerns that this will slow growth and hinder global efforts in establishing common solutions. “Unilateral action by the EU would seriously undermine international efforts to address tax issues,” Susan Danger, head of the American Chamber of Commerce to the EU (AmCham EU), said.
Jean-Claude Juncker, President of the European Commission, has recently stated: “I want decisions in the Council (of EU ministers) to be taken more often and more easily by qualified majority”. In fact, he believes that tax reforms in the European Union should no longer require unanimous agreement from all 28 ministers and for this reason, has suggested to adopt a “qualified majority”as opposed to unanimity which has delayed and blocked major tax reforms so far.
UK MPs have accused Amazon and eBay of VAT evasion, stating that the two online giants have been increasing their profits by “turning a blind eye” to organised criminals selling undervalued and misclassified goods in the UK market .
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