Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-09-06-Speech-2-334"
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"en.20050906.35.2-334"2
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".
I am in a fortunate position at the time of the proposal for a one-stop shop scheme for value-added tax returns. This package of proposals could certainly be a major step towards building a unified internal market. With the introduction of this scheme – which I hope will be possible in early 2007 – small traders for whom it has not been worthwhile employing or contracting a tax advisor to deal with their value-added tax affairs in other Member States, will be able to file their VAT returns without a tax advisor. This will allow them to obtain refunds that they have not been able to claim up to now. The lack of such refunds has been damaging their competitiveness and they have suffered a disadvantage compared to larger enterprises. We know that more than half of the outstanding VAT owed to businesses is not being refunded at present (according to a survey by the Commission).
A positive aspect of the proposal is that everyone will be able to deal with these matters in their own language and with the help of their home authorities, and will be able to receive the VAT owed to them or make VAT payments directly. As the Committee on Economic and Monetary Affairs seeks to translate into practice its proposed amendments, electronic administration will speed up registration and the recording of any modification to the data. Another advantage for businesses is that the deadline for refunding value-added tax can been shortened.
The scheme does not change current practice whereby value-added tax is payable in the country of consumption; in other words it is neutral with regard to different tax rates. I agree with the Commission’s approach with regard to launching the introduction of the simplified scheme. In other words, it does not want to open up debate as regards the fundamental issue of whether VAT should be paid according to the place of origin of the supplier or goods, or according to the place of consumption, as is current practice. I hope that in the Council the Member States too will be principled enough to forgo tying this positive initiative to such a fundamental philosophical debate.
The other advantage of the proposal is that it opens up a path for progress on a number of issues on the basis of common principles, and this progress will evolve precisely as a result of the one-stop system. A case in point is the first common list of exclusions from VAT deduction. This would make any items that are excluded in all Member States – primarily luxury consumption items – subject to common regulations. It thereby avoids tying the hands of businesses, but does not seek to link the right to deduct VAT in future to the place of establishment – rather than to the place of consumption – thereby also facilitating information-gathering and planning for small businesses and eliminating unnecessary competitive situations. Another case I would also include here, however, is the possibility it creates to enable easier inspection of an enterprise’s turnover in the case of distance selling, in other words simplifying distance selling arrangements up to a reasonable threshold set for the whole of the European Union rather than for each Member State. Up to a threshold of EUR 150 000, businesses would be able to choose whether to pay VAT on the revenue from distance selling in the country of consumption or the country of establishment.
The electronic system – use of which will incidentally be optional for the Member State and the business concerned – will also help us to set a uniform maximum VAT-exemption threshold for small businesses. The Committee on Economic and Monetary Affairs also adopted my suggestion to set a minimum VAT-exemption threshold to be applied for the first three years of activity of a newly established business. By doing so we are providing a sound incentive for new businesses and a stimulus for family employment in line with the Lisbon strategy.
Progress has been made on a number of other issues, too. First of all, I accept the caution evinced by the Commission in its decision not to review experience with the regime for trade conducted electronically until after 2006; at the same time, it may also review whether this system could be extended to the current one-stop scheme. It will consider in particular whether to allow businesses also to file VAT returns and make refund applications electronically via the relevant tax office based on the place of establishment.
Another important advance is the proposal to examine how to build a uniform electronic system permitting cooperation among national tax administrations, eliminating abuses and speeding up inspections. In the interests of legal certainty, the time permitted for the tax administration to ask further questions or request additional information prior to making a refund should be made even shorter, since this would help to enhance businesses’ liquidity.
In order to make the system more business-friendly, I have proposed that the whole of the one-stop scheme and the modifications now being implemented in connection with it should be subject to a thorough review by the Commission four years after its adoption, to analyse experience so far with the scheme and propose any modifications deemed necessary. I think this would also be a reasonable occasion for the Member States to review the application of a value-added tax payment scheme based on place of origin.
Finally, I would like to thank all my colleagues and the experts from the European Commission for their good work and constructive approach."@en1
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