BTW op diensten aan consumenten: Commissie houdt openbare raadpleging (en)

donderdag 3 februari 2005

The European Commission has launched an open consultation for views from the public on possible improvements to the EU Value Added Tax (VAT) rules that apply when services are supplied to private consumers. The Commission will, on the basis of the reactions, decide whether to present a proposal to modify the current rules. The current basic rule in such cases is that the VAT rate that applies is that of the place of establishment of the service provider. However, with the increasing provision of services across borders, this rule no longer always ensures that the tax accrues to the Member State where consumption takes place. In addition, it can cause a competitive handicap for EU suppliers compared to non-EU suppliers. The paper that forms the basis of the consultation therefore seeks reactions to suggestions for possible modifications of the basic rule in the case of services provided at a distance. Similar changes have been made to the rules to cope with international trends in the supply of digital services (see IP/02/673) and the Commission proposed changes to the rules governing the supply of services where the customer is a trader in December 2003 (see IP/03/1808).

"We want to hear the views of the public on how to ensure that the VAT rules operate fairly in an international environment" said Mr László Kovács i, European Commissioner for Taxation and Customs. "With globalisation and technology changes, it is increasingly possible for services to be supplied to EU private consumers at a distance, including from outside the EU."

The consultation paper

The current basic rule provides that, when a trader provides a service, such as telecommunication services, to a private consumer, the trader is responsible for applying the VAT and the rate is that of the country where the trader has his place of establishment. However, with the increasing supply of services across borders, the paper points out that this rule no longer always ensures that the tax accrues to the Member State of consumption. It can also cause problems of distortions of competition. Traders supplying services across a range of EU Member States may relocate their activities to Member States with low VAT rates, or even outside the EU, in order to minimise or avoid the application of VAT.

The paper proposes maintaining the current basic rule in the case of services more likely to be supplied locally because this rule is very straightforward for traders to apply.

However, to ensure that VAT receipts accrue to the Member State of consumption, the paper considers changing the place of taxation to that of the private consumer for some specific services i.e. passenger transport services; restaurant and catering services; short term hiring of means of transport; exhibitions; fairs; cultural events etc.; and other services capable of being supplied at a distance.

Such a change would mean that traders supplying these services to private customers in other Member States would have VAT compliance obligations in those other Member States. However, these obligations would be greatly simplified if the Council adopts the Commission's proposal of 29 October 2004 for a One-Stop-Shop and other measures to simplify VAT obligations (see IP/04/1331).

The outcome of the consultations will be made available on the consultations website at the address below. Individual responses may be made public unless the respondents indicate that they wish them to remain confidential.

Other online European Commission consultations can be accessed via the "Your Voice in Europe" portal at