B2C 2015 VAT Reform: Recent developments and upcoming events

We are pleased to update you on some recent EU VAT developments that we believe are very relevant for all e-commerce and digital businesses in the context of the B2C 2015 VAT changes and their implementation projects.

Next meeting of the B2C 2015 Working Group

Our next meeting of the B2C 2015 Working Group is planned to take place on Wednesday 23 April 2014, all day, in PwC Brussels’ offices. More information on the agenda will follow in due course. Please contact me if you have not received our invitation and would like to join us.

EU Commission and the Explanatory Notes on B2C 2015 VAT changes

As a follow up to the Fiscalis Workshop in Amsterdam last November, we would like to let you know that the dates of the meetings with business and the EU Member States, where the Commission’s services will consult both stakeholders on the new updated working version of the Explanatory Notes, are fixed.

The meeting with business will take place next Monday, 17 February 2014 and will be held in Brussels. The invitations have been sent out by the Commission’s services to the businesses and experts that attended or contributed to the Amsterdam Fiscalis, including PwC.

The new updated working version of the 2015 Explanatory Notes has been shared last week via the Commission’s online communication platform (PICS). Unfortunately we cannot publish it here as we have been asked by the Commission not to distribute this draft document to general public.

If everything goes according to plan, the final notes should be published on the Commission’s website by mid April 2014 at the latest. During our April meeting of the B2C 2015 Working Group we will discuss these final notes to help your business fine-tune the requirements of the rule change.

The meeting with the EU Member States (VAT Committee) will take place on 24 and 25 February (all day 24 Feb will be devoted to the draft 2015 Explanatory Notes).

In June, the EU Commission will start communication road shows in the UK and in the US. The UK conference is planned for early June under the lead of the EU Commission and UK HMRC. The US conference is planned for end June in Washington under the lead of the EU Commission and AmCham.

These UK/US conferences will be open for businesses and Member States. More information will follow via the Commission’s website.

EU Commission Guide to the 2015 MOSS published

We are pleased to inform you that a shorter version of the Guide to the VAT Mini One Stop Shop, which does not contain the specific information for the Member States, is now available on the DG TAXUD website in all EU languages (as well as in Chinese, Japanese and Russian languages). You can access the 2015 MOSS Guide via this link.

The Guide has been prepared by DG TAXUD in order to provide a better understanding to business of the relevant EU legislation relating to the MOSS, as well as the functional and technical specifications for the EU and non-EU MOSS schemes.

This guide is not legally binding but provides practical and informal guidance about how EU law is to be interpreted and applied on the basis of the views of DG TAXUD. The Guide remains a work in progress and will be complemented later by the 2015 Explanatory Notes on the 2015 place of supply changes.

VAT pilot cross border transactions project extended

The EU VAT Forum extended for another year the pilot project aimed at improving legal certainty for small and medium sized businesses in their cross border VAT transactions. The pilot project was launched in June 2013 to allow the EU Member States to provide their advance opinion on the VAT treatment of complex cross border transactions.

The pilot project is open to all EU Member States, and to date the following 14 Member States are engaged in the project: Belgium, Estonia, Spain, France, Cyprus, Latvia, Lithuania, Malta, Hungary, The Netherlands, Portugal, Slovenia, Finland (newly joined) and the UK. Names of other EU Member States will be added on the Europa website as soon as they confirm their participation.

A mid-term review of the project will be carried out in June 2014. If the results are positive, the Commission may recommend further development of this project.

When planning cross border transactions to one or more participating EU Member States, the proposed introduction of cross border rulings offers the opportunity for your business to request a ruling in the participating EU Member State where they are VAT registered, with regard to the envisaged transactions.

For some more information please follow this link (see “Legal certainty for cross border transactions: VAT pilot project extended”).

Expert Group on the Taxation of the Digital Economy

The Commission High Level Expert Group on Taxation of the Digital Economy is examining the best ways of taxing the digital economy in the EU, weighing up both the benefits and risks of various approaches. The focus is on identifying the key problems with digital taxation from an EU perspective, and presenting a range of possible tax solutions.

The Expert Group, which was set up in October 2013, will meet approximately five times and report back to the Commission in the first half of 2014. It is chaired by Vítor Gaspar, a former finance minister of Portugal.

On 14 and15 January 2014, the Expert Group held their second meeting during which the Group also discussed how the digitisation of the economy with the rise of e-commerce, impacts the principles underlying the EU VAT system. See the Summary Record and the Working Paper on VAT issues on the dedicated web page.

The next meeting of the Expert Group has been scheduled for 13 and 14 March 2014.

About Sophie Claessens

Senior Tax Manager PricewaterhouseCoopers Tax Consultants Belgium email: sophie.claessens@be.pwc.com Mobile: +32 473 91 05 67 Office: +32 3 259 3169

Sophie Claessens is an international VAT advisor, based in Antwerp, Belgium, with a particular focus on business-to-consumer industries, including telecommunications, media, internet and e-commerce. She supports major industry players on sector-specific issues, including VAT compliance at both an operations and strategic level, and is directly involved in policy work for businesses in these industries, both at the Belgian level and at the level of the European Commission. She is responsible for indirect taxes in the communications sector at PwC Belgium and is a driver of PwC's Business Working Group on the EU 2015 VAT changes. She has authored articles for publication in Belgian and international tax journals.