My colleague Rob Janering has just produced a strong analysis of the latest developments in the controversy over VAT on e-books.

As Rob notes, Italy, by following the example of France and Luxembourg last year, and drastically reducing the VAT rate on e-books, has made a bold statement against the Commission. France and Luxembourg are, after all, being taken to ECJ for their actions; but it looks like the Italians aren’t bothered by the Commission’s threats. I wonder whether the fact that Luxembourg is involved has encouraged the Italians. Given EC President Jean-Claude Juncker’s (now) notorious tax policies while Prime Minister of the Duchy, the Italians might be questioning the Commission’s credibility as an arbiter of fair play in this matter. Juncker, remember, single handedly stalled the development of the MOSS for electronic services, as the reform was against his nation’s interests.

It begs the question: how is Juncker going to lead the push for major EU VAT reform? Can he credibly speak up for a standard return or argue for the extension of the Mini-one-stop shop principle to distance sales?

While on the subject of the mini-one-stop-shop: what a bloodletting there has been over the introduction of the MOSS for electronic services! We’ve written in detail on the subject, but it was still a surprise to see just how much the traction the #VATMOSS #VATMESS campaign against the reform got in such a short space of time. We will look at some of the points raised by anti MOSS campaigners in future blogs.

In previous blogs I have noted how little the new EU Tax Commissioner, Pierre Moscovici, has had to say about VAT. So it was interesting to see him defending the new MOSS on Twitter just before Christmas. He tweeted:                        

New ?#EUVAT rules for e-services will ensure fair distribution of tax revenues in ?#Europe and create a level playing field between businesses

Unsurprisingly, his comments came in for criticism from furious internet retailers (‘nope, it does the opposite, it punishes the small guys for the favor of the established giants’ by @metekkmonkey encapsulates the general sentiment). Even less surprising was Moscovici’s dig at the UK as he responded to his critics:

Together with ?@Ansip_EU, I will follow closely the implementation of new ?#EUVAT rules for e-services, voted also by the UK in 2008

Because British businesses have complained about the new rules, Moscovici wants to drag the UK government into the story. The classically divisive politics of the EU in action; just a month into the job, and Moscovici is pointing fingers. It’ll be interesting to see how he responds to HRMC’s adjustment to the rules for UK internet retailers…

By |January 13th, 2015|