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I. ON URGENT MEASURES TO FIGHT VAT FRAUD AND TACKLE THE VAT GAP
The Council of the European Union:
1. RECALLS the utmost importance of robust legal rules which hamper VAT fraud and AGREES with the Commission and the Court of Auditors that improving administrative cooperation between tax authorities is of significant importance in the fight against VAT fraud, and hence UNDERTAKES to pursue discussion on means of enhancing the scope of administrative cooperation and stepping up efforts to exchange information between tax administrations; [...]
6. HIGHLIGHTS that this work should promote co-operation and cover the full range of available means and methods and alignment of procedures, including, inter alia, VIES, Eurofisc, feedback procedures and customs procedure 42, where the challenges both to customs and tax authorities must also be addressed; [...]
8. UNDERLINES that as discussed during an informal meeting of ECOFIN ministers in Amsterdam, automatic exchange of information is one of the ways forward in the fight against fraud;
9. CONFIRMS that risk assessment and analysis remains a major area for further improvement in the EU, and INVITES the Commission, after the results of the feasibility study on Transaction Network Analysis have been evaluated by Member States, to present relevant initiatives enabling the Member States, wishing to start this tool on a voluntary basis, to exercise such an option, and at the same time ASKS the Commission to consider the possibilities of an explicit legal basis;
10. RECOGNISES that some Member States are more heavily affected by VAT fraud than others and the need to find practical and short-term solutions rapidly, and TAKES NOTE of the position of the Commission regarding a possible temporary derogation for certain Member States to apply the reverse charge mechanism in a wider scope and that the implementation of such derogation would require legislative measures; [...]
II. ON SHORT AND MEDIUM-TERM ACTIONS IN VAT AREA AND SMEs
The Council of the European Union: [...]
15. EMPHASISES that the ultimate objective remains that VAT compliance costs in the single market are brought closer to the levels of those in domestic trade, however, further simplification should not result in an increase of VAT fraud risks or disproportionate rise of the costs of tax administration; [...]
17. In the context of the Digital Single Market Strategy, STRESSES the importance of finding an EU-level solution rapidly to eliminate the competitive disadvantage for EU suppliers and UNDERTAKES to review the scope and discuss the possibility of repealing the VAT exemption for final importation of small consignments of goods into the EU by non-EU suppliers, considering also the impact of possible changes on the customs administration;
18. RECOGNISES the need to simplify cross-border e-commerce, and the opportunity to extend the "One Stop Shop" for online sales of tangible goods to final consumers and CALLS FOR further analysis and technical work to be undertaken on a common EU-wide simplification measure, including a threshold;
19. NOTES that the debate will continue concerning a possible introduction of legal means allowing for home country checks, including a single audit of cross-border businesses; [...]
III. ON THE DEFINITIVE VAT SYSTEM (SINGLE EU VAT AREA)
The Council of the European Union: [...]
24. REITERATES that the principle of “taxation in the Member State of origin of the supply of goods or services”, as envisaged in article 402 of Directive 2006/112/EC on the common system of value added tax, should be replaced by the principle of “taxation in the Member State of destination” for the definitive VAT system for B2B transactions, as stated in the Council conclusions of 15 May 2012; [...]
IV. ON VAT RATES
The Council of the European Union:
29. TAKES NOTE of the directions of action proposed in the Commission Action Plan on VAT with regard to the VAT rate system and its intention to make a legislative proposal in 2017, proposing a reform to give more freedom to Member States in setting up rates and proposing two options;
30. RECALLS the conclusions of the European Council of 17-18 March 2016 which welcomed "the intention of the Commission to include proposals for increased flexibility for Member States with respect to reduced rates of VAT, which would provide the option to Member States of VAT zero rating for sanitary products";
31. WELCOMES the intention of the Commission to present a proposal for increased flexibility for Member States, so that they could benefit from the existing reduced and zero rates in other Member States, INVITES the Commission to include an impact assessment, and STRESSES that a sufficient level of harmonisation in the EU remains required and the adopted solution has to be carefully balanced to avoid distortion of competition, rise in business costs and negative impact on the functioning of the single market;
2016 draft directive maintaining the minimum standard VAT rate
VAT action plan, Towards a single EU VAT area