DOCUMENTS:
Draft Council Directive amending Directive 2006/112/EC on the
common system of value added tax as regards a standard VAT return:
(35419), 15337/13 + ADDs 1-3, COM(13) 721.
BACKGROUND
22.5 The principal VAT Directive, Directive 2006/112/EC,
requires all taxable persons to submit a declaration (a VAT return)
with all the information needed to calculate the tax that has
become chargeable and the deductions to be made, including, as
required, the total value of the relevant transactions. However,
Member States retain discretion over the content of the declaration,
frequency of submission, payment, error correction and all other
related processes.
22.6 The Commission has proposed this draft Directive
to introduce an EU level standard VAT return, aiming for a balance
between simplification for EU business and the needs of all 28
tax authorities.
22.7 When we considered the proposal in December
2014 we reminded the Government of our wish to receive regular
reports about developments in Council consideration of the proposal
and asked to receive the next report no later than shortly after
the end of the Latvian Presidency. In fact in February the Government
gave us a full account of the context within which that Presidency
was starting work on the proposal, mentioning in particular its
request that Member States consider a standard VAT return on the
basis of implementation being optional for Member States. We looked
forward to further reports as negotiations progress. Meanwhile
the document remained under scrutiny.
THE
MINISTER'S
LETTER OF
9 MARCH 2015
22.8 The Financial Secretary to the Treasury (Mr
David Gauke), reminding us of the Latvian Presidency request to
Member States to consider a standard VAT return on the basis of
implementation being optional for Member States, says that at
a Council working group meeting on 27 February all Member States
signalled support for an optional standard VAT return. The Minister
continues that:
· this formed the basis of discussion and
as a consequence there was broad agreement to reducing the information
boxes on the standard VAT return;
· Member States saw merit in a common format
(in terms of numbering and content of the boxes) but saw no real
benefit in any common presentation (colour, logo etc); and
· Member States agreed that there should
be no need for any of the provisions to be left to the comitology
process.
22.9 The Minister reiterates his previous comments
to us that:
· an optional standard VAT return is an
approach the Government could support since UK businesses trading
across Member States could see a benefit;
· it is unlikely that the Government will
want to opt into a standard VAT return because UK businesses value
the UK's existing simple nine box return and are very clear that
they would prefer to keep that; and
· the Government, with other Member States,
continue to make the case for a wider application of the EU web
portal as this initiative has the potential to provide substantial
benefit to businesses trading across the EU.
22.10 The Minister then says that:
· given the strong support from Member States
the Government expects the Latvian Presidency to seek political
agreement (in May or June) to an optional standard VAT return,
with the proviso that work should then continue on the detail
to reduce the number of information boxes and to firm up content;
· overall, this would be a welcome outcome
for UK businesses — they would continue to benefit from
the simple UK return and those that trade with Member States which
adopt a standard VAT return would benefit too;
· businesses would also be able to call
for reform in Member States that do not have a simplified VAT
return; and
· the Commission is now looking at ways
to take forward the initiative for a wider application of the
EU web portal building on the 2015 model so as to include additional
information.
22.11 The Minister concludes by asking us, on the
basis of the information he now provides, to consider clearing
the proposal from scrutiny, in order that the Government could
take a positive position at an ECOFIN Council should the Latvian
Presidency seek political agreement.
PREVIOUS
COMMITTEE REPORTS
Twenty-fifth Report HC 83-xxii (2013-14), chapter
8 (27 November 2013), Twenty-fifth Report HC 219-xxiv (2014-15),
chapter 6 (10 December 2014) and Thirty-fourth Report HC 219-xxxiii
(2014-15), chapter 9 (25 February 2015).
