REPORT on the proposal for a Council directive amending Directive 2006/112/EC as regards conferral of implementing powers to the Commission to determine the meaning of the terms used in certain provisions of that Directive

16.6.2021 - (COM(2020)0749 – C9‑0002/2021 – 2020/0331(CNS)) - *

Committee on Economic and Monetary Affairs
Rapporteur: Irene Tinagli

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a Council directive amending Directive 2006/112/EC as regards conferral of implementing powers to the Commission to determine the meaning of the terms used in certain provisions of that Directive

(COM(2020)0749 – C9‑0002/2021 – 2020/0331(CNS))

(Special legislative procedure – consultation)

The European Parliament,

– having regard to the Commission proposal to the Council (COM(2020)0749),

– having regard to Article 113 of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C9‑0002/2021),

– having regard to the reasoned opinion submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Swedish Parliament, asserting that the draft legislative act does not comply with the principle of subsidiarity,

– having regard to Rule 82 of its Rules of Procedure,

– having regard to the report of the Committee on Economic and Monetary Affairs (A9-0201/2021),

1. Approves the Commission proposal;

2. Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

3. Asks the Council to consult Parliament again if it intends to substantially amend the text approved by Parliament;

4. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

 

EXPLANATORY STATEMENT

The Commission has currently no implementing powers in respect of the VAT Directive. The only existing tool for the Commission to promote the uniform application of EU VAT rules is an advisory committee set up under Article 398 of the VAT Directive, the ‘VAT Committee’.

 

Because it is an advisory committee, the VAT Committee can currently only agree non-binding guidelines on the application of the VAT Directive, whereas binding implementing measures may only be adopted by the Council based on a Commission proposal (Article 397 of the VAT Directive). The guidelines have thus a voluntary character and have failed to ensure the uniform application of the EU VAT legislation.

 

The discrepancies in the interpretation of the VAT Directive by Member States are likely to result in instances of double taxation and entail uncertainty and additional costs for business, which usually only come to an end, after a considerable time, with a ruling of the CJEU, sometimes leading to an interpretation which was not previously shared by the majority of Member States.

 

In order to put a remedy to the situation described above and allow for the adoption of binding interpretations for all Member States of a number of VAT provisions, the Commission proposes a change to the VAT Directive in order to create a committee that would oversee the adoption of implementing acts in certain areas of VAT by the Commission. This proposal was announced in the Communication on an Action Plan for Fair and Simple Taxation supporting the Recovery Strategy.

 

The new committee will be set up pursuant to Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (the ‘Comitology Regulation’). The procedure it will follow is the examination procedure as required by Article 2 of the Comitology Regulation, which requires a qualified majority vote for the adoption of implementing measures.

 

Some aspects are to be underlined:

 

• First, comitology procedures would only be applied in connection with a limited set of rules implementing the provisions of the VAT Directive, for which a common interpretation is required. Any change to the VAT Directive shall require, as is the case today, unanimous agreement in Council.

 

• Second, it is in the interest of both tax administrations and businesses to facilitate the adoption of common interpretations of the provisions of the VAT Directive, since discrepancies in this area are likely to result in double taxation, distortions of competition and additional costs for businesses. In this regard, comitology is the long-standing standard approach used in EU Law for facilitating the emergence of those common interpretations. It is worth noting that in the field of indirect taxation, standard comitology procedures are already used for VAT administrative cooperation and excise duties.

• Third, the Council shall retain its implementing powers insofar as they do not fall within the strictly defined scope of empowerment of the Commission and in particular on substantial matters especially sensitive for Member States.

 

• Fourth, the old 'VAT Committee' will remain as a forum of discussion with the possibility of adopting guidelines.

 

Against this background, your rapporteur proposes that Parliament approves the Commission proposal. The Directive will allow the Commission to propose common interpretations of a number of provisions of the VAT Directive, which would prevent discrepancies in their application to the benefit of businesses, and which could be adopted by qualified majority voting in Council.

 

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PROCEDURE – COMMITTEE RESPONSIBLE

Title	Amending Directive 2006/112/EC as regards conferral of implementing powers to the Commission to determine the meaning of the terms used in certain provisions of that Directive
References	COM(2020)0749 – C9-0002/2021 – 2020/0331(CNS)
Date Parliament was consulted	7.1.2021
Committee responsible  Date announced in plenary	ECON 18.1.2021
Rapporteurs  Date appointed	Irene Tinagli 26.1.2021
Discussed in committee	10.5.2021
Date adopted	15.6.2021
Result of final vote	+: –: 0:	44 7 5
Members present for the final vote	Gunnar Beck, Marek Belka, Isabel Benjumea Benjumea, Stefan Berger, Gilles Boyer, Francesca Donato, Engin Eroglu, Markus Ferber, Jonás Fernández, Frances Fitzgerald, José Manuel García-Margallo y Marfil, Luis Garicano, Sven Giegold, Valentino Grant, Claude Gruffat, José Gusmão, Eero Heinäluoma, Michiel Hoogeveen, Danuta Maria Hübner, France Jamet, Othmar Karas, Billy Kelleher, Ondřej Kovařík, Georgios Kyrtsos, Philippe Lamberts, Aušra Maldeikienė, Pedro Marques, Fulvio Martusciello, Jörg Meuthen, Csaba Molnár, Siegfried Mureşan, Caroline Nagtegaal, Luděk Niedermayer, Lefteris Nikolaou-Alavanos, Piernicola Pedicini, Lídia Pereira, Kira Marie Peter-Hansen, Sirpa Pietikäinen, Evelyn Regner, Antonio Maria Rinaldi, Alfred Sant, Joachim Schuster, Ralf Seekatz, Pedro Silva Pereira, Paul Tang, Irene Tinagli, Ernest Urtasun, Inese Vaidere, Johan Van Overtveldt, Stéphanie Yon-Courtin, Marco Zanni, Roberts Zīle
Substitutes present for the final vote	Manon Aubry, Eugen Jurzyca, Chris MacManus
Substitutes under Rule 209(7) present for the final vote	Maria Arena
Date tabled	16.6.2021

 

 

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

44	+
PPE	Isabel Benjumea Benjumea, Stefan Berger, Markus Ferber, Frances Fitzgerald, José Manuel García-Margallo y Marfil, Danuta Maria Hübner, Othmar Karas, Georgios Kyrtsos, Aušra Maldeikienė, Fulvio Martusciello, Siegfried Mureşan, Luděk Niedermayer, Lídia Pereira, Sirpa Pietikäinen, Ralf Seekatz, Inese Vaidere
Renew	Gilles Boyer, Engin Eroglu, Luis Garicano, Billy Kelleher, Ondřej Kovařík, Caroline Nagtegaal, Stéphanie Yon-Courtin
S&D	Maria Arena, Marek Belka, Jonás Fernández, Eero Heinäluoma, Pedro Marques, Csaba Molnár, Evelyn Regner, Alfred Sant, Joachim Schuster, Pedro Silva Pereira, Paul Tang, Irene Tinagli
The Left	Manon Aubry, José Gusmão, Chris MacManus
Verts/ALE	Sven Giegold, Claude Gruffat, Philippe Lamberts, Piernicola Pedicini, Kira Marie Peter-Hansen, Ernest Urtasun

 

7	-
ECR	Michiel Hoogeveen, Eugen Jurzyca, Johan Van Overtveldt, Roberts Zīle
ID	Gunnar Beck, Jörg Meuthen
NI	Lefteris Nikolaou-Alavanos

 

5	0
ID	Francesca Donato, Valentino Grant, France Jamet, Antonio Maria Rinaldi, Marco Zanni

 

Key to symbols:

+ : in favour

- : against

0 : abstention