EU Action Plan interaction with Brexit – Digital Markets impact areas:
The EU Commission adopted an Action Plan for VAT on 7 April 2016 and we are continuing to see consultation papers emerging to address the four key themes in the plan:
- On Going Policy initiatives:
- removing obstacles to e-commerce in the Single Market
- SME’s VAT Package
- Urgent Measure to tackle the VAT gap:
- Improving cooperation within the EU and with non-EU countries
- Towards more efficient tax administrations
- Improving voluntary compliance
- Tax collection
- Towards a robust single European VAT area:
- Definitive VAT regime for cross- border trade
- Towards a modernised VAT Rates policy:
- More freedom for Members States on rates policies
At the time of writing, a range of EU proposals are in circulation - one example is the Digital Single Market Package. Some of the proposals will straddle the UK’s effective departure date from the EU Single Market in 2019 - making the assumptions that negotiations do fulfil the UK’s current position for a “Hard Brexit” that is.
Certainly in 2018 there is a proposal to implement new registration thresholds for cross border supplies of electronic services aimed to help micro and small businesses with a threshold of €100k before they are drawn into the MOSS regime.
Beyond that date – and one to consider in terms of how MOSS will interact post Brexit – is the extension of the regime to include online sales of goods and all cross-border services to private consumers.
Other proposals include:
- The removal of the Distance Selling Regime
- Removal of the small value import VAT relief
- A new One Stop Shop for Imports where VAT will be collected at point of sale to EU customers by the sellers
- Further Import VAT simplification mechanism whereby the VAT is collected from the customers with a monthly declaration by the transporter.