Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-12-01-Speech-4-008"
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"en.20051201.3.4-008"2
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We are debating two issues, and I shall start with the minimum standard VAT rate. We are debating an issue of extreme legal and political sensitivity. According to the Commission’s report, an extension of the current temporary regime based on the Sixth VAT Directive – which expires on 31 December 2005 – would be justified. What I mean is that we could set the minimum standard rate only, at the current level of 15%, and extend this regime, still with a temporary effect, to 2010. The Committee on Economic and Monetary Affairs of our Parliament has debated this proposal, and basically agrees with the approach of the Commission. Accordingly, we too agree with the proposal and with its time frame, namely with the extension to 2010. We also accepted the necessity of having to debate this issue with extraordinary speed, before the last ECOFIN session on 6 December, to enable the Council to have the opinion of Parliament and make a decision in view of it. Based on the debate of the Committee, we amend the original proposal tabled by the Committee in respect of one issue, namely that apart from the minimum standard we would also like to set the maximum rate at 25%, which would be the highest rate currently used in Member States; this would avoid any of the Member States having to resort to legislation amendments or budget course corrections in the very short term. However, by adopting this course of action, the majority of our Parliament indicates that we believe in the necessity of preventing divergence of standard VAT rates. However, our Parliament has also adopted another significant position on this issue, which does not affect the current prompt decision of prolongation, but it is important to us. We would actually like to avoid a situation similar to the current one, where we are pressed for time both in respect of the extension of the minimum standard VAT rate and the intensive employment regime expiring at the end of the year, which has been implemented with the involvement of several Member States who have all gained valuable positive experience in the process. Therefore we ask the Commission to prepare a study by the beginning of 2007, to enable Parliament to start a debate in 2007-2008 in good time, without any rush, concerning the direction and depth of the VAT policy to be implemented by Member States, and the European Union regulation required in this respect.
In our request proposal prepared with the participation of all parliamentary factions, we ask the Commission to evaluate the current standard implicit – that is, converted to one rate – VAT level differentials and their budgetary implications, particularly in respect of the differentiations seen in Member States joining the EU during the last enlargement, which are unable to apply the individual reduced rates, and can only effect transition to the special areas not included in the Sixth VAT Directive (that is, not included in Annex K or Annex H) until 2007. Based on the material to be prepared by the Commission, we will be able to define our parliamentary position on the issue of VAT charged at source or charged to the consumer, and then examine whether or not, in the spirit of subsidiarity, we need to set a minimum and a maximum rate at Community level, and if the answer is yes, whether we should use the normal standard or implicit – that is, the actual converted – rate for these VAT rates. Another further issue to be debated by Parliament in the following years in light of the efficiency of the Stability and Growth Pact is the extent of freedom to be granted to Member States for the possible reduction of VAT rates, and whether the standard rates or the individual exemptions from standard rates are most likely to distort the market (if they distort it at all). At the same time, we could also examine the issue of whether the priority given to consumption tax – at the expense of direct taxes, and mainly taxes affecting the workforce – can actually assist Member States in achieving the Lisbon employment targets. These would be the issues of the next debate, for which sufficient time should be allowed. I am convinced that a good background report prepared by the Committee may assist Parliament with this issue, and we will be able to accept a considered position even before 2010, but at this point we still propose extension, with the amendment that we must also set the maximum rate, at 25%.
My second report concerns VAT refunds. The amendment to the Eighth Directive, tabled before us, is part of a highly significant, triple amendment package tabled by the Commission in October 2004, the effect of which has been – rightly – extended by the current Commission, and which has become famous for the single-window system, the so-called ‘one-stop-shop’. Parliament has already adopted a position on this issue, as well as on tax cooperation between Member States, in connection with two reports tabled before Parliament, and now I am pleased that at the request of the Council we are also able to express our views, even if retrospectively, on the Eighth Directive addressing VAT refunds. First of all, I would state that we fully agree with the approach of the Commission to the entire draft package, including the amendment to the Eighth Directive, as this helps enterprises collect outstanding VAT from other Member States, and it also speeds up this process by the use of electronic methods. So far, collection has only been possible if an entity was VAT registered in another Member State. Many refused to follow the extended and costly procedure, and in the majority of cases outstanding VAT has not been collected at all, because the administrative procedure would have cost more than the actual amount of outstanding VAT. The current amendment will primarily improve the situation of small and medium-sized enterprises, which had the most difficulty in sustaining the apparatus required for refunds in a cost-effective manner.
The approach of the Council allowing a period of three months for the competent authorities to assess a claim is also small-enterprise-friendly. We also support the proposal that a very stiff, one-month late penalty fee must be paid by the competent tax authority for each month after the expiry of the time limit. We did not accept the proposed amendment that would have left this to be regulated individually by Member States. Our amendment proposals have also been formulated in line with this approach of the Commission, as we have emphasised that alongside enterprise protection, the tasks of Member State tax authorities must also be stated clearly, with rectifications where required, and specific time limits for forwarding, consideration, decision making and refund. This is the content of our amendments. We also specified separately that the three-month investigation period cannot re-commence even in the event of queries, requests for additional information or any other problems – as we have understood from the Commission’s proposal – as in our opinion the full procedure cannot exceed four months even in the presence of such problems. Our proposal aims at avoiding unnecessary delays in the refund period and keeping the moneys in treasury funds. Although for legal reasons we were unable to include this in our opinion as a formal amendment proposal, I still hope that as part of the package, as part of the overall OSS package, the speed of cooperation between authorities will increase, as this helps avoid cash-flow problems for small enterprises, problems related to VAT refund entitlement and the determination of ratios, and even abuses, because fraud and the formation of fictitious companies very often arise from an attempt to reclaim fictitious export VAT.
I hope that in the course of the Council debate, the 10–40-day time limit for electronic data forwarding, given to tax authorities in the country of residence, may be shortened in respect of the upper limit of 40 days. However, the priority is to implement the package as soon as possible, and we hope that in a few years (we asked for four years in connection with the OSS) we will be able to evaluate implementation based on the Commission’s report. I am convinced that the procedure (and the screening of abuses) may be speeded up in the future by using some kind of a shared database – or by easier access to the databases of other Member States – but this will require the settling of a large number of legal, data protection and other issues, which should be looked into following the first evaluation.
Therefore, at present, the most important thing is that this constructive proposal is put into effect as soon as possible, and that our enterprises may enjoy its benefits."@en1
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