The following 2 VAT items are on the agenda the following meeting of the Economic and Financial Affairs (ECOFIN) Council, which will take place on June 16, 2017:
· Reduced VAT rate for electronic publications; and
· VAT reverse charge mechanism.
Reduced VAT rate for electronic publications
The Council will be invited to agree on the proposal for a directive that aims to amend the current EU VAT rules in order to allow e-publications to benefit from reduced VAT rates, at the discretion of the member states.
Currently, in most EU countries, e-publications are charged a standard VAT rate (a minimum of 15%), and publications on physical media can benefit from significantly lower rates, which may sometimes be reduced to 0%.
In this respect we also refer to our article from June 2, 2017 “European Parliament adopts a legislative resolution on the proposal for a Council directive amending Directive 2006/112/EC, as regards rates of value added tax applied to books, newspapers and periodicals”.
VAT reverse charge mechanism
The Council will be invited to agree its general approach on a proposal for a Council directive that would allow a temporary application of a generalised VAT reverse charge mechanism, in derogation from the from the main general principles of the EU's current VAT system.
The application of the mechanism will be voluntary for member states and granted under certain conditions for domestic transactions between businesses involving services or goods with an invoice exceeding €10 000.
The reverse charge moves the responsibility for the reporting of a VAT transaction from the seller of goods or services to the buyer.
The proposal was made following a request by member states that are particularly affected by VAT fraud and do not have sufficient measures to combat it.
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