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E-publications VAT proposals stalled

Gareth Bevan 23 June 2017 No comments

The European Commission’s proposal to enable Member States to align the VAT treatment of e-publications with printed ones has hit problems following a Council of Economy and Finance Ministers (ECOFIN) meeting on 16th June 2017 .

The proposal which was a key element of the VAT Digital Single Market Package had seemed to be progressing smoothly with little resistance up until then.

ECOFIN Meeting

At the meeting the following European Commission VAT proposals were discussed:

  • a directive enabling Member States to opt to apply reduced rates of VAT to e-publications under the European Union’s “digital single market” plan; and
  •  a directive that would permit Member States to apply a domestic generalised reverse charge under certain conditions . Under the proposal the reverse charge mechanism would apply to all domestic supplies of goods and services above an invoice threshold of EUR 10,000.

However the Council was unable to reach agreement on either matter.  Unanimity of the Member States is necessary for the proposals to be adopted and taken forward.

It is understood that lawyers to the European Council of Ministers had previously raised concerns about the generalised reverse charge proposals. However, the lack of agreement on the e-publications proposal in particular is disappointing after the European Parliament had voted in favour of them 590 votes to 8, with 10 abstentions at the beginning of the month.

We will keep you informed of any future developments on these proposals.