European Commission
Taxation and Customs Union
Administrative Burden
Reduction
Taxation Issues
High Level Group on Administrative Burdens, 30 January 2014
European Commission Taxation and Customs Union
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Towards a simpler VAT System
COM(2011)851 on the future of VAT:
 A simpler, more transparent VAT system
 reduce administrative burden
 encourage increase of cross border trade
 Measures achieved:
 Electronic refund procedure: Council Directive 2008/9/EC
 Electronic invoicing: Council Directive 2010/45/EU
 Mini One Stop Shop (MOSS): Council Directive 2008/8/EC
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Electronic invoicing
 First Directive on VAT Invoicing: Council Directive
2001/115/EC
─ Applicable as of 1 January 2004
─ Different rules on e-invoicing in the MS (prior notification,
requirement of e-signatures or EDI as approved methods, etc.)
─ Business reluctance to use e-invoicing given discrepancies and
inter-operability issues
─ High Level Group on Administrative Burdens recommended in
2008 that paper invoices and e-invoices should be treated equally
 COM adopted in 2009 a proposal for the second invoicing
Directive
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Electronic invoicing
 Second Directive on VAT Invoicing: Council Directive
2010/45/EU
− Applicable as of 1 January 2013
− Electronic invoicing on an equal footing with paper invoices
− Estimated savings €18 billion
− COM issues Explanatory Notes for a clear understanding of the
new VAT invoicing rules:
(http://ec.europa.eu/taxation_customs/resources/documents/tax
ation/vat/traders/invoicing_rules/explanatory_notes_en.pdf )
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Electronic invoicing: Council Directive 2010/45/EU
 Implementation state of play
− Implemented by all Member States
− COM issued a reasoned opinion to Cyprus to transpose the
legislation on 20 November 2013
− Cyprus published relevant legislation on 20.12.2013
− No major problems of implementation reported by Member States
 Follow-up implementation
− No ex-post evaluation undertaken yet by Member States, apart
from BE (ex-post: €172.1million)
− Generally well received by Member States and businesses
− Increased use of e-invoicing is expected, including for SMEs
− Some Member States consider providing open-source software for
e-invoicing
− COM will make a formal assessment of the e-invoicing rules by
31/12/2016, focusing on the decrease in administrative burdens
for businesses
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Electronic refund procedure: Council Directive
2008/9/EC
 Applicable as of 1 January 2010
 Estimated savings: €447million
 Main features:
− Fully electronic procedure  quicker refund to applicants
− Use of standardised codes for types of expenses/business
activities (Commission Regulation (EC) No 1174/2009)
− Taxable persons will be paid interest if Member States are late
making refunds
− Replaces the previous paper-based procedure (slow,
cumbersome, and costly)
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Electronic refund procedure: Council Directive
2008/9/EC
 Implementation state of play
− Implemented by all Member States
− Technical problems of implementation reported by Member States
in the first half year of 2010
• COM and Member States formed a project group to assess the
problems
• Agreement on new national IT procedures /guidelines to MSs to solve
the problem
• COM prepared a Vademecum & an Information Document to facilitate
the application of the Directive:
(http://ec.europa.eu/taxation_customs/taxation/vat/traders/vat_refu
nds/index_en.htm)
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Electronic refund procedure: Council Directive
2008/9/EC
 Implementation - Current issues reported by Member States:
− Inconsistencies/interoperability issues in Member States' IT
systems (choice of different parameters)  additional IT
adjustments and increased costs
− Insufficient training of business users to file correctly the
application
− Some Member State do not send a notification message regarding
the reimbursement to traders
− Delays in reimbursement by certain Member States
 COM response
− Project group to analyse inconsistencies
− Implementation of improvements by 1 July 2013
− Infringements ongoing or under examination.
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Electronic refund procedure: Council Directive
2008/9/EC
 Follow-up implementation
− No ex-post evaluation undertaken yet by Member States
− System improved from its 2010 launching: easier, less costly
− Presumed effective due to:
−increased number of applications each year
−reduced period of reimbursement
− Member States responses:
−Tangible savings: reduction of staff dealing/hours spent with this
task, reduction of postal fees.
−Costs associated: IT costs for the web-portal and its adjustments
− COM to launch soon a general compliance cost study (2014), to
assess over time the impact of changes of EU legislation
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On-going Initiatives
 MOSS
− New rules applicable from 1 January 2015
− 3 implementing regulations adopted
− COM published in October 2013 a Guide to the VAT mini One
Stop Shop
− Another set of guidelines on place of suply rules to be published
soon
− Estimated savings on administrative burden: € 463 million
 VAT Standard Return
− COM proposal published in October 2013;
− Estimated savings on administrative burden: €15 billion/year
− Under discussion in Council
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Future initiatives
 Extension of the one-stop-shop to distance sales of goods
− Study planned for this year
− Proposal in 2014/2016 (TBC)
 Definitive regime of VAT
− Study ongoing on different options
− Discussions with Member States and business
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Thank you for your attention!
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