OPP Meeting Summary: Economic and Financial Affairs Council – VAT e-commerce package (7 November 2017)

A summary of the debate on the general approach is available.

Economic and Financial Affairs Council – 7 November 2017
VAT e-commerce package:
-Council Directive as regards certain VAT obligations for supplies of services and distance sales of goods
-Council Implementing Regulation laying down implementing measures
-Council Regulation on administrative cooperation and combating fraud in the field of VAT
13840/17 13841/17
General approach
– View related documents and the next stage of the procedure in the Policy Pipeline

Estonian Presidency

  • the aim of the proposals was to introduce several simplifications to the existing VAT Mini One-Stop-Shop (MOSS) for business-to-consumer cross-border electronic services by 2019 and to extend it by 2021, as well as increase administrative cooperation between the Member States (MS);
  • the Commission proposal had been redrafted 14 times;
  • he was convinced that the Presidency compromise proposal was well-balanced. The compromise text allowed online platforms to be held liable for the collection of VAT, which was a clear contribution for the efficient tackling of fraud;
  • uncollected VAT on online distance sales of goods from third countries cost the EU approximately 5 billion EUR per year and digitisation would only increase it;
  • the key open issues had been resolved but several delegations had maintained political reservations on various parts of the compromise text;
  • he called on flexibility from the MS.

Mr Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs

  • he was happy with the work that had been done on the proposal, and he believed that it was time to make decisive progress in the field of VAT;
  • the proposal was a part of a more overarching ambitious framework proposed by the Commission;
  • the Paradise Papers leak was an impetus for the EU to move forward on transparency and to make structural reforms to the financial system;
  • he thanked the Estonian Presidency for its efforts to reach a general approach;
  • the proposed system would be a part of the Digital Single Market (DSM) strategy which all of the MS fully supported;
  • the Commission “would be thinking about” fair and efficient taxation of digital services in the spring of 2018;
  • the Commission had also discussed the issue of digital companies paying their share of tax;
  • if the proposals were implemented, estimates had shown that additional 7 billion EUR per year could be generated from VAT revenues;
  • he understood the concerns by some delegations that extension of the MOSS would create further administrative burdens but the MOSS was an essential step;
  • he stressed that the EU should become the world leader in the fight against VAT and tax fraud;
  • there would be significant changes in the IT systems but the entry into force of the provisions should not be delayed as it would harm consumers;
  • he described the current temporary VAT system as “obsolete”;
  • regarding the draft statement to be included in the minutes of the Council, he stated that the Commission would suggest to include a more general reference to the principle of Better Regulation;
  • the Presidency compromise text was not a technical text, but one that would “open doors”. 


  • taxation had been a largely technical issue for a very long time, but had recently become a “political hot topic” for European citizens;
  • President Macron wanted to strengthen taxation rules as well as make them stronger;
  • it was about fairness, not pointing fingers at certain big companies. He questioned how EU SMEs could be expected to pax tax if companies like Google or Amazon did not pay their fair share of tax for their European activities;
  • France had made concessions and even though it was not fully what they had wanted, in the spirit of compromise France would be supporting the general approach;
  • following the adoption of the text, the obligations of tax authorities would need to be clarified regarding oversight.


  • Spain fully supported the proposal because of the positive impact on the internal market;
  • it reinforced the principle of taxation at destination, enhanced harmonisation, and companies would not have to cooperate with 28 different tax administrations;
  • enhancing mutual trust and cooperation among tax authorities was going to be a key element in the implementation.


  • it was an important and necessary step forward to fight tax fraud and evasion;
  • the completion of the DSM was crucial because the digital challenges ahead for the EU were enormous;
  • Germany would be supporting the proposed measures for 2019 and he believed that agreement could be found for the measures for 2021 soon under the Estonian Presidency;
  • Germany still had several substantial reservations regarding the expansion of the MOSS that needed to be discussed. The substantial shift of responsibilities from the MS of consumption to the MS of registration was of particular concern;
  • VAT was an important subject for all of the political parties involved in the formation of a new government in Germany;
  • he could not support the general approach but he was optimistic that it could be settled under the Estonian Presidency.


  • he stated that the Presidency compromise text was “just and fair” and that Denmark would be supporting it.


  • Italy fully supported the compromise proposal;
  • the new provisions were necessary to bring VAT rules in line with business model developments in e-commerce as well as reduce the burden of compliance for business operating across border;
  • Italy welcomed the extension of the MOSS mechanism;
  • the adoption of the proposal would reduce fraud opportunities and competitive distortions.


  • he believed that the compromise text would reduce revenue losses, reduce complexities and create a level-playing field;
  • concerning the administrative costs, he stated that Belgium supported the proposal outlined in the Presidency text;
  • he agreed that the issue of administrative cooperation would be of key importance in the future;
  • Belgium supported the compromise proposal.


  • she agreed with the comments stating that there should not be any delay in the implementation. It was important to show leadership;
  • the UK supported the Presidency compromise text.


  • Slovenia was able to support the Presidency compromise text. It represented an important step forward in comparison to the existing rules, and would pave the way forward for the bigger proposals on VAT;
  • regarding administrative cooperation, she stated that Slovenia was willing to be flexible on the scope.


  • Austria recognised the importance of the file for the DSM;
  • there had been reservations about the Article on monthly VAT returns but in the spirit of compromise Austria would be withdrawing that reservation and would fully support the Presidency compromise.


  • the EU had constantly been the frontrunner in the fight against tax evasion;
  • Luxembourg supported the proposal because it was important to evolve the taxation of e-commerce;
  • Luxembourg had been prepared to accept the compromise text as it stood but in the light of the comments made by Germany, he stated that the adoption could wait another month to tackle the issues regarding cooperation between MS;
  • he insisted on gaining more clarity on the responsibility of online platforms from the Presidency.


  • Finland was ready to accept the Presidency”s proposal;
  • he understood the German situation and stated that the adoption could wait another month.


  • Sweden would be supporting the Presidency’s text, and she hoped that an agreement could be reached as soon as possible.


  • Croatia believed that the modernisation of VAT rules was the right response to the challenges of the digital era;
  • increased cooperation between the MS would counteract any possible shortcomings of the proposal;
  • in the spirit of compromise, Croatia was in favour of reaching a general approach on the basis of the Presidency’s compromise text.


  • it was essential to reach a general approach as soon as possible, in order to allow enough time to prepare detailed implementation rules;
  • Lithuania supported the Presidency compromise text.


  • Poland supported the compromise text;
  • effective taxation of e-commerce was crucial for the internal market and the competitiveness of European businesses.


  • Ireland was committed to tackling tax fraud through the proposed move to the destination principle;
  • Ireland was ready to support the compromise text, but noted that the general approach could not be reached. He hoped that the outstanding political issues could be resolved without delay in December.


  • Malta was prepared to accept the Presidency compromise text which was balanced;
  • it was important to resolve any remaining issues so an agreement could be reached as soon as possible.


  • Latvia supported the general approach prepared by the Presidency;
  • she stated that Latvia wanted more flexibility on the proposed timescale of 10 years for record keeping;
  • Latvia supported the collection of a fee for administrative cooperation but she stated that Latvia was prepared to be flexible in the spirit of compromise.


  • Slovakia supported the compromise text, and it if it was not possible to reach a general agreement during the session, then it should be swiftly done in December.


  • Portugal accepted the Presidency compromise proposal.

The Netherlands

  • the Netherlands would support the compromise proposal in its current form;
  • he stated that the Netherlands had always taken an international perspective on the issue of tax avoidance;
  • he stressed the need for transparency and anti-abuse measures.

Commissioner Moscovici

  • it was clear that there was strong support for the Commission’s proposal, which had been improved by the Presidency;
  • he had listened very closely to the points made by Germany, and he welcomed Germany’s open-minded approach to reach an agreement by the end of the year.

Estonian Presidency

  • he was thankful for all of the useful comments received;
  • the reservations raised would have to be carefully examined, with the aim of bringing the proposal back to a future Council meeting in December.

Source: One Policy Place

The simultaneous interpretation of debates provided by the European Parliament serves only to facilitate communication amongst the participants in the meeting. It does not constitute an authentic record of proceedings. One Policy Place uses these translations so this text is only a guide and should not be relied on as an official account of the meeting. Only the original speech or the revised written translation of that speech is authentic.

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