Implementing the definitive VAT system - Related Opinions
The EESC supports the Commission's ambition to kick-start a necessary debate, given the sensitivities of Qualified Majority Voting (QMV) in tax matters. At the same time, the EESC considers that there are certain conditions that would need to be met for QMV to be successfully implemented. The EESC is aware that tax policy has always been closely linked to the sovereignty of Member States, as it is of utmost importance to them.
Following in-depth economic, social and fiscal analysis, any new rule must be fit-for-purpose and all Member States must at all times have sufficient possibilities to participate in the decision-making process. Creating an advantageous outcome both at the EU level and at the level of the individual Member State should be the ultimate objective.
The EESC welcomes the Commission’s proposals and recommends that they be swiftly adopted and implemented by the Member States. The Committee agrees with the Commission's proposal to allow Member States to use two reduced VAT rates and recommends that the Member States continue to apply reduced rates to certain classes of goods and services of general interest.
The EESC welcomes the Commission's proposal for a definitive VAT system and calls upon the Member States to cooperate closely for reaching the agreement regarding the new system. The Committee stresses that the quick fixes proposed by the Commission are important as intermediary steps for the functioning of the VAT system and encourages the Member States to adopt the quick fixes for all businesses.
The Committee calls on the Member States to step up their efforts in combatting aggressive tax planning, along with tax avoidance that could lead to significant losses of revenue for Member States' budgets. The EESC believes that the harmonisation and simplification of tax rules should be a priority for the Member States and that the elimination of tax barriers should go hand in hand with these harmonisation efforts. The Committee proposes to extend the common consolidated corporate tax base (CCCTB) and recommends that Member States to look for solutions to implement the recommendations of the High Level Group on Own Resources. Finally, the EESC feels that the introduction of qualified majority voting in the field of direct taxation could support better the efforts to harmonise the rules on establishing the tax base for the main taxes.
The EESC welcomes the package on the modernisation of VAT on cross-border e-commerce, and endorses both its objectives and its focus on addressing the concerns of SMEs. The Committee welcomes the proposed extension of the MOSS to goods as it creates conditions for the possible removal of the Low Value Consignment Relief (LVCR) scheme. Furthermore, the amendments to the VAT rates applicable to e-publications rules would eliminate the distinction between physical and non-physical publications, and ensure neutrality in this market.
The EESC welcomes the "Action Plan on VAT", and calls for a definitive VAT system that is clear, consistent, robust and comprehensive, as well as proportionate and future-proof. The Committee welcomes the strong focus on closing the VAT gap and tackling the susceptibility of VAT to fraud. There should be results delivered without delay, including by improving cooperation between tax administrations. “Bona fide” enterprises should be protected and no new excessive measures should be imposed on them. The future system of reduced rates must combine flexibility and legal certainty, be transparent, and for the sake of simplicity the number of reduced rates and exemptions must be limited.
The Committee welcomes the Commission's legislative proposals as a step in the right direction, as they halve the GNI contribution and compensate for that with two new own resources, one based on VAT and the other on a tax on financial transactions. The EESC regrets that the text under discussion does not refer to the new own resources in order to address the key issue of budget size. The Committee regrets the fact that the Commission has not used this opportunity to provide financial support to help fulfil the obligations arising from the Treaty of Lisbon, the 2020 Strategy or the need to take measures to stimulate growth.