Richard Cornelisse

e-Learning modules on VAT

In Indirect Tax Strategic Plan on 26/07/2016 at 5:19 pm

VAT eLearning programme developed by the European Commission consists of 12 individual courses. The eLearning modules on value added tax (VAT) aim at presenting the fundamental elements of the VAT Directive.

The modules have an EU-wide perspective and do not explain national variations or derogations. Having completed all individual eLearning modules on VAT the learner should have a good understanding of the key principles of the EU VAT directive, to be incorporated into national legislation.The twelve eLearning modules on VAT are now available in 15 languages.

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Public Consultation on reduced VAT rates for electronically supplied publications – European Commission

In Indirect Tax Strategic Plan on 25/07/2016 at 7:17 pm
  • Member States have the options to tax printed books, newspapers and publications at a reduced rate (minimum 5%) and some Member States were granted the applications of VAT rates lower than 5% (super-reduced rates) including exemptions with a deductions right of VAT at the preceding stage (so called zero rates) to certain printed publications.

    On the other hand, digital publications that are electronically supplied have to be taxed at the standard VAT rate.

  • A harmonisation of VAT rates for electronically supplied services and in particular electronically supplied publications was a need until 2015. Since 1 January 2015, with the entry into force of new “place of supply” rules , VAT on all telecommunications, broadcasting and electronic services is levied where the customer is based, rather than where the supplier is located.

    Suppliers can therefore no longer benefit from being located in the Member State with the lowest VAT rates.

  • While acknowledging the differences between printed and electronically supplied publications with regard to the format, they offer the same reading content for consumers and the VAT system needs to keep pace with the challenges of today’s digital economy.
  • Having carefully considered these issues, the Commission made a commitment in its 2016 Actions Plan on VAT (Com (2016) 148 final) indicating that it will make a legislative proposal in 2016 to allow Member States to apply to electronically supplied publications the same VAT rates that Member States can currently apply to printed publications.
  • Period of consultation: from 25.07.2016 to 19.09.2016

Source: Public Consultation on reduced VAT rates for electronically supplied publications – European Commission

Shift from direct tax to indirect tax

In Indirect Tax Strategic Plan on 21/07/2016 at 9:15 am

CFOs / Head of Tax apparently still focus more on direct tax than indirect tax. This is interesting as from a tax revenue perspective the current trend is a shift from direct tax to indirect tax by decreasing direct tax rates and increasing VAT/GST rates.

Corporate income tax rates are continuing to fall in many countries. Global indirect taxes can amount to as much as 75% of the overall corporate tax burden, with VAT and sales/use tax outlays nearly 40% of total business tax expenditures — almost twice as much as corporate income tax.

More than 160 countries have a VAT regime. In the EU, between 2008 and 2013, the average EU standard rate increased from around 19.5% to more than 21%. The EU average VAT rate is now approximately 21.5%. VAT accounts for more than 20% of total tax revenue (OECD).

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