PURPOSE: to amend Council Regulation (EU) No 904/2010 on administrative cooperation in the field of VAT as regards the status of certified taxable person.
PROPOSED ACT: Council Regulation.
ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.
BACKGROUND: in its VAT action plan, the Commission announced its intention to submit a proposal setting out the principles of a definitive value added tax (VAT) system for cross-border business-to-business trade between Member States.
The certified taxable person is one of the essential elements of this new definitive VAT system for intra-Union trade. The concept of the certified taxable person should allow or proving that a specific taxable person can be considered as a reliable taxpayer within the Union.
In this context, it is essential for businesses and tax administrations that the certified taxable person status of a business can be checked immediately and online.
This proposal is part of the package of legislation to introduce a definitive VAT system for intra-Union cross-border trade based on the principle of taxation in the Member State of destination of the goods in order to create a robust single European VAT area.
IMPACT ASSESSMENT: the impact assessment for the proposal was considered by the Regulatory Scrutiny Board on 14 July 2017. The Board gave a positive opinion to the proposal with some recommendations that have been taken into account.
CONTENT: the proposal seeks to amend Council Regulation (EU) No 904/2010 so as to give a practical effect to the certified taxable person status, which is a basic component of the definitive VAT regime for intra-Union trade based on the principle of taxation in the Member State of destination of the goods, as announced in the VAT action plan.
Under this proposal, the certified taxable person status shall be integrated into the VIES system (VAT Information Exchange System).
To that end, it is necessary that all Member States store information on businesses and their certified taxable person status in an electronic system and that the competent authorities of each Member State ensure that confirmation is provided of the certified taxable person status of any business.
The proposal simply defines a framework regarding the certified taxable person status, while operational control and application measures remain the responsibility of the Member States. In particular, the granting or repealing of the certified taxable person status of individual taxable persons, based upon commonly agreed conditions, remains the sole competence of the Member States.