EU VAT reform – VAT Expert Group comments on the “quick fixes”
carolineheath 1 May 2019 No comments
At their last meeting the VAT Expert Group (VEG) discussed the EU “quick fixes” legislative package which is due to be implemented from 1 January 2020.
What are the “quick fixes”?
The short-term quick fix measures are designed to improve the day-to-day functioning of the current VAT system, until the definitive regime has been fully agreed and implemented. See our earlier blog articles here and here for more information on the proposed definitive VAT system and the “quick fixes” package.
The quick fix measures cover:
- A simplification for call-off stock arrangements (where a business moves goods from one Member State to hold as stock in another Member State for an intended customer whose identity and VAT identification number are known at the time of transport).
- A simplification of chain transaction situations identifying the supply with which the intra-Community transport of goods should be linked.
- A simplification relating to the proof of transport of goods between two Member States needed for the application of the exemption to intra-Community supplies.
- Clarification that, in addition to the proof of transport, the VAT number of the commercial partners as recorded in the electronic EU VAT-number verification system (VIES) is required in order to apply the cross-border VAT exemption under the current rules.
What is the VAT Expert Group (VEG)?
The VEG assists and advises the European Commission on VAT matters. The group is composed of:
- individuals appointed in a personal capacity with the requisite expertise in VAT, and
- organisations representing businesses and tax practitioners which can assist in the development and implementation of VAT policies.
The European Commission papers on the quick fix package
|The European Commission has provided the VEG with two working papers outlining the provisions within the legislative package for their discussion.
The papers are:
The VEG has produced a paper with comments from its members on the VEG No 079 and 080 papers. The document, which is not a formal position paper, includes numerous issues and points which in their view need further clarification.
The following extract from the paper highlights that, rather than being a simplification, many VEG members view the new measures as actually increasing the burden for businesses:
What businesses should do
All three papers are useful reference material for any business involved in the B2B intra-EU movement of goods. Businesses affected by the changes should familiarise themselves with the new requirements to ensure they meet the relevant conditions needed to benefit from the measures from January 2020.
It will be interesting to see how the European Commission responds to the VEG’s comments, and if as recommended they produce explanatory notes to help businesses ahead of the implementation date.