Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-12-13-Speech-3-165"
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".
Mr President, in this joint debate we are going to discuss three reports which relate to four Commission proposals, which means that I have an unusual number of roles to play. I am rapporteur for two of them, I am shadow rapporteur for Mrs Torres Marques’s report and I am tabling amendments to the report on aviation fuel, because I do not agree with some of the ideas which were approved in committee.
Consequently, services provided by European companies to non-European companies would always be exempt from the tax, which would revive our international competitiveness. Secondly, services provided by European companies to European customers would be subject to tax, as is normal. And thirdly, services provided by non-European companies to European companies would also be subject to tax, which establishes equality of conditions, in other words, fair play, on an international level.
The problem does not stem transactions between companies, but occurs when the receiver of the service is a private individual, and here the Commission is doing the only thing it can do: oblige non-EU companies to register in a country of the European Union so that from there, with a Community passport, it can provide services to the whole of the Union, while having to pay the same tax as the European companies.
In my view, this solution resolves the problem of eliminating previous discrimination and achieves the objective of simplification. A company only has to register in one country of the Union. It does not have to register in fifteen, it does not have to understand fifteen different sets of legislation and does not have to struggle with fifteen administrations. However, it does not resolve the problem of fairness. We know that a solution such as this – establishment in one country with the opportunity to provide services to the whole of the Union – could lead to an avalanche towards those countries with the lowest taxes. The French Presidency therefore proposed that non-EU companies providing services in the Union should have to register in all fifteen countries, which contradicts the objective of simplification.
What does the Commission propose? The Commission proposes, respecting the objective of simplification, a single place of establishment, but that the tax recovered by the Treasury of that country should be redistributed amongst the other countries of the Union, in accordance with the relative consumption. That is exactly the formula which will enable the introduction of VAT at source, it is exactly the formula which we have decided for cross-border returns of VAT and it is exactly the formula Ecofin has approved, in accordance with the Feira conclusions, in the case of withholding taxes.
Is this Commission communication complete? It is not. There are certain problems which I have highlighted in the explanatory statement, such as ensuring that a company which can provide services from outside the Union is registered.
How can we guarantee that there is no discrimination between similar products? Digital service, the consultation of or access to a book or a magazine, would be taxed at the normal rate if this were done via the Internet, whereas it would be subject to a lower rate when it is supplied physically.
How can we resolve the problems of identifying the client? The responses contained in the Commission’s proposal seems to me to be adequate, and in any event, Mr President, these difficulties are clearly not exclusive to the taxation of digital services. VAT is a tax that was intended to cover the movement of goods and does not suit the provision of services, especially a phenomenon as new as Internet services.
The second of the reports I am going to refer to deals with the problem of hydrocarbons, and the issue is very simple. The 1992 Directive established a mandatory exemption for fuels used in international aviation and, at the same time, established a review of the exemption in order to take account of environmental costs.
The legal difficulties for this revision are found in the 1944 Chicago Convention, an international obligation, which exempts on-board fuel supplied to aircraft from tax, and the bilateral agreements. Faced with this situation, the Commission ordered a study, which is the one we are investigating here, on what can be done. The first conclusion is that little can be done until the international framework is modified. The second conclusion reached by the Commission is that it would be desirable to have a tax on national flights and on intra-Community flights, subject to modification of the bilateral agreements, which is something I do not agree with. Thirdly, and this I do agree with, the need – within the international framework of the ICAO – to make all the progress necessary to establish a tax which is world-wide, and therefore not discriminatory, on Community transport.
Mr President, having abused your patience, I impatiently await the criticisms and comments of the other Members, both from my group and from others.
The second peculiarity, as you will have the opportunity to discover, is that I am in an unusual position within my own group. My military career was neither long nor distinguished, but I did learn that the role of the artillery was to bombard the infantry, if possible, the enemy infantry. I fear that I am currently trapped in my group’s own crossfire.
I will start by discussing the first of the reports, which relates to VAT on e-commerce.
The proposal which the Commission has referred to Parliament has, in my opinion, a priority objective: to remedy the discriminatory situation currently suffered by European e-commerce companies in comparison to companies from third countries. E-commerce refers to the provision of services delivered by Internet and radio and TV services provided by subscription or ‘pay per view’. I am stressing this because some of the amendments intend to establish a zero rate of VAT for services which, in my opinion, are not of an essential or social nature.
The Commission also has other secondary objectives, in accordance with the traditional thinking of ministries of finance: to achieve this objective – that of ending this discrimination – by simplifying the tax, making it considerably more effective in terms of the recovery and reduction of the administrative costs relating to the collection of taxes, to achieve the objectives of efficiency and fairness and to achieve, finally, the modernisation of the tax system. These objectives, the main one and the secondary ones, will be the touchstone by which the concrete proposals submitted by the Commission must be judged.
However, Mr President, I said that the first of these criteria by which we must judge this proposal is the need to end the discrimination suffered by European companies in comparison with third countries. This discrimination comes about because Article 9 of the sixth directive establishes the presumption that the place where the service is provided is the address where the service provider is officially established. In other words, at the moment European companies are subject to VAT when they provide electronic services, whether that be inside or outside the Union. On the other hand, companies established outside the Union never pay VAT, whether they are providing services to European clients or to clients in other parts of the world, thereby harming our competitiveness in external markets.
To sum up and to put it very simply, the services provided by European companies currently suffer a tax burden which is not suffered by third country companies who provide services within the Union. Therefore, current European legislation encourages European e-commerce companies to establish themselves outside the Community. Some of the arguments which we will hear in the course of this afternoon will say that burdening outside companies which provide services within the Union would put a brake on the growth of e-commerce, but precisely the opposite is true, since maintaining this state of affairs harms the growth of the European e-commerce industry.
We all agree on this, both on this side and on the other side of the Atlantic. We are so much in agreement that, at the Ottawa Conference in 1998, three conclusions were reached which I consider to be important: firstly, national taxes on consumption must be applied to consumption which takes place within national territory. Secondly, the provision of digital products constitutes a provision of services rather than a delivery of goods. Thirdly, we must turn to simple formulae for recovering taxes and, specifically, the reversal of the taxable person.
In accordance with this objective, and with this international legal framework agreed by everybody in Ottawa, the Commission proposes the amendment of the sixth directive to lay down that digital services should be established in the place where the receiver is established rather than the provider."@en1
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