INDIRECT TAX (16112/05)
Letter from the Chairman to Rt Hon Dawn
Primarolo MP, Paymaster General, HM Treasury to the Chairman
Thank you for your letter of 31 January [16]updating
the Committee on progress made on indirect taxation dossiers during
the UK Presidency. Sub-Committee A considered this at their meeting
on 14 March together with your Supplementary Explanatory Memorandum
16112/05 dated 10 January.
15 March 2006
Letter from the Rt Hon Dawn Primarolo
MP to the Chairman
On 31 January 2006, I provided you with updates
on progress made on indirect tax dossiers during the UK Presidency.
This included a brief update on the package of VAT simplification
measures designed to ease the burden of VAT compliance, primarily
for businesses involved in cross-border trade (Explanatory Memorandum
14248/04). Your reply of 15 March let me know that the scrutiny
reserve had been lifted, but also asked that you be kept up to
date on the progress of this dossier.
You will recall that the package as a whole
consists of Proposals for two Council Directives and a Council
Regulation (which covers the administrative arrangements for the
two Directives).
The Austrian Presidency has now held five Working
Group meetings on the package (with two of those meetings covering
two days). The two most recent meetings have focused solely on
the proposed Council Directive to reform the cross-border refund
procedure. Technical work on that Proposal is more advanced than
is the case with the Proposal for Council Directive to simplify
value added tax obligations.
The Presidency has now schedule the package
as a whole for discussion at ECOFIN on 5 May. The Presidency will
suggest splitting the package up to make it more manageable and
to enable reform of the cross-border refund procedure to go ahead
to a slightly quicker timescale, if at all possible. The Austrian
Presidency hopes that the legislative technical discussions on
that part of the package could be concluded either during its
term, or during the Finnish Presidency. In principle, that would
then enable the legislative text for that Proposal to be agreed
separately and earlier than the Proposal for a Council Directive
to simplify value added tax obligations. Work on the Proposal
for a Council Directive to simplify value added tax obligations
would continue in parallel, but that work is likely to take longer
to conclude.
The Government would not object to such an approach
if raised at ECOFIN. It would enable work on both Proposals to
continue in parallel, but would also allow for the possibility
of completing the work and reaching agreement on the refund procedure
in quicker time. Indeed, UK businesses have been pressing for
genuine improvements to the current system, which the proposed
electronic system would offer. I will keep you informed of progress
on these issues.
I hope you find this information helpful.
Undated: May 2006
16 Correspondence with Minister, 45th Report of Session
2005-06, HL Paper 243, p 83 Back
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