Progress on VAT issues

The VAT-MOSS issue was raised today in a debate in the European Parliament by a number of MEPs.

Encouragingly, European Commission Vice-President Timmermans, responding to the debate, confirmed that the Commission was taking these concerns very seriously, and that they had started to work on it even before David Cameron raised the issue at last week’s European summit — presumably because of the Labour MEPs (including myself) and others who have been raising it with the Commission in recent months.

I spoke to Timmermans after the debate. I understand that the Commission will be looking into three aspects in particular:

• the question of a threshold below which smaller companies would be exempt from charging VAT
• the rule requiring sellers to retain records for 10 years
• the rule requiring two proofs of identity from the buyer

I was assured that the Commission wishes to act rapidly on this. However, let’s not forget that this was a decision originally taken not by the European Commission, but by national governments of the EU. Any proposal to change the existing legislation therefore also requires the assent of all 28 national governments. This is one of the downsides of the unanimity requirement which applies in some fields of European decision-taking.

So it’s essential to make the case to nation governments, not just to the Commission!