EU: VAT Expert Group Publish Minutes of its 32nd Meeting

Have you ever wanted to be a fly on the wall during the EU's most significant discussions regarding VAT? Or perhaps you're satisfied with leaving the nitty-gritty of the VAT decision-making process behind closed doors - as long as it doesn’t impact your business. Regardless of where you fall on the scope, we're in the loop so you don't have to be. Here's everything you need to know about the latest VAT Expert Group (VEG) meeting. 

The VEG recently released a summary of the 32nd VEG meeting notes which took place on 6 December 2022 in Brussels. In this meeting, critical points were discussed regarding the VAT in the Digital Age package, the Travel and Tourism package and the decision of the Court of Justice of the European Union (ECJ) in case C-235/18. 

The VAT Expert Group (VEG)

The VAT Expert Group (VEG) aims to assist and advise the European Commission on all matters relating to VAT. This includes a meeting to discuss all new policy legislative acts and relevant policy matters. Generally, the main focus is to examine the limitations or challenges regarding the practical implementation of VAT legislative acts and how specific countries could benefit from certain changes or where they may experience a drawback. In the event of any VAT-related changes or upcoming incentives and their implementation, the VEG may be consulted to consider VAT administration issues and best practices. 

The first meeting following the new mandate

The 32nd VEG meeting was the first meeting following the current VAT Expert Group mandate. On 12 September 2022, 40 members were appointed by the Director-General for Taxation and Customs Union (DG TAXUD). Both the Director General for DG TAXUD and the Director of Indirect Taxation and Tax Administration of DG TAXUD were present in the meeting to welcome the newly appointed members. As this was the first meeting involving a significant number of new members, the meeting opened with an overview of the rules of procedure and the purpose and remit of the VEG. After that, the following main topics of the agenda were discussed regarding the 2020 Tax Action Plan and an update on the state of play:

The VAT in the Digital Age package

During the meeting, the European Commission services informed the group of postponing the adoption of the legislative proposal on VAT in the Digital Age until 8 December 2023. The Commission also provided a brief overview of the ViDA package, confirming that the initiative is composed of three pillars: Digital Reporting

Requirements (DRR), the VAT treatment of the platform economy and Single VAT

Registration (SVR). The proposal envisages a few core changes to the ViDA package.

A meeting in Council is expected to be organized by the Czech Republic Presidency to present the proposal. Discussions would then resume under the Swedish Presidency.

The Travel and Tourism package 

During the meeting, a proposal was given on the three-part initiative's most significant problems and objectives. This included; 

(i) the special scheme for travel agents; 

(ii) the VAT rules on passenger transport and

(iii) the exemption on the supply of goods to non-EU travelers.

The Commission highlighted the main objectives and challenges within the reform, the different policy options, and their main impacts. Regarding the state of play of the package, it was reported that a study is under preparation, which will provide data and evidence for the preparation of an impact assessment to accompany any potential future legislative proposal. 

The decision of the Court of Justice of the European Union (ECJ) 

During the meeting, The Commission services also provided an update regarding the work undertaken regarding the Vega International Case that concerned theof VAT treatment of fuel cards. The VEG first identified the case as part of the selected CJEU case law giving cause for concern. The importance of finding a solution was stressed, and the impact of the case and the need to find a solution that does not harm the sector were highlighted. Consultations on the topic are ongoing, and the case will be brought back to the VAT Committee to settle the matter.

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