13 Value added taxation
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14248/04
COM(04) 728
| Draft Directive amending Directive 77/388/EEC with a view to simplifying value added tax obligations
Draft Directive laying down detailed rules for the refund of value added tax, provided for in Directive 77/388/EEC, to enable taxable persons not established in the territory of the country but established in another Member State
Draft Regulation amending Regulation (EC) No 1798/2003 as regards the introduction of administrative cooperation arrangements in the context of the one-stop scheme and the refund procedure for value added tax
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| Legal base | Article 93 EC; consultation; unanimity
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| Department | HM Treasury |
| Basis of consideration | Minister's letter of 9 February 2006
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| Previous Committee Report | HC 34-xi (2005-06), para 7 (23 November 2005)
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| To be discussed in Council | Not known
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information awaited
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Background
13.1 In 2003 the Commission published a programme for improving
the operation of the value added tax (VAT) system within the context
of the internal market.[48]
The three legislative proposals in this document were presented
by the Commission in October 2004 as a package dealing with simplification
of VAT on cross-border supplies under that programme. They are:
- a draft Directive to amend the rules to introduce a one-stop
scheme for VAT — a technologically-based compliance framework
which would allow businesses trading across borders to deal predominantly
with a single tax authority;
- a draft Directive to provide detailed rules for
the refund procedure for businesses established in one Member
State, where VAT is incurred by them in another Member State;
and
- a draft Regulation to amend administrative co-operation
arrangements to support the one-stop scheme and refund procedure.
13.2 Our predecessors considered these proposals
in December 2004[49]
and we considered them further in October and November 2005 in
the light of the outcome of the Department's consultations and
other matters the Government had reported to us. We asked also
to be kept informed of developments on issues related to refund
procedure and threshold matters.[50]
The Minister's letter
13.3 The Paymaster General (Dawn Primarolo) writes
now to inform us of developments. Reminding us that this is an
ambitious and comprehensive package which will take up considerable
discussion time, that there had been some initial discussions
of the proposals under the Dutch Presidency, that there had been
none under the Luxembourg Presidency and that work resumed under
the UK Presidency, she tells us that although good progress has
been made, more remains to be done. The Minister says the Austrian
Presidency has indicated that it will continue to give priority
to the proposals during the first half of 2006.
13.4 As for the issues related to refund procedure
and threshold matters the Minister tells us that both are still
very much under discussion. On the refund procedure she explains
that there is considerable support for an electronic system, which
offers genuine improvements for businesses over the current system.
On turnover thresholds for domestic registration, she says the
issue has still not been finally concluded.
Conclusion
13.5 We are grateful to the Minister for this
report of developments and look forward to information on further
developments in due course. Meanwhile the document remains uncleared.
48 (24978) 13853/03: see HC 42-i (2003-04), para 1
(3 December 2003). Back
49
HC 38-ii (2004-05), para 5 (8 December 2004). Back
50
See headnote. Back
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