Companies & groups · ES
From: Spanish VAT Services Asesores, SL Date: 24 March 2023 Feedback on VAT in the Digital Age proposal (ViDA) - Proposal for a Council Directive amending Directive 2006/112 as regards VAT rules for the digital age. - Proposal for a Council Implementing Regulation amending Implementing Regulation (EU) No. 282/2011 as regards information requirements for certain VAT schemes. - Proposal for a Council Regulation amending Regulation (EU) No. 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age.
Regulation (EU) No. 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age. 1.- Special scheme for transfers of own goods Exemption on the transfer of own goods The special scheme for transfers of own goods proposed to be introduced in Section 5 of Chapter 6 of Title XII of the VAT Directive (Articles 369xa et seq.) is a good initiative to simplify the VAT compliance obligations that many businesses face as a consequence of moving their own goods between Member States. These movements of goods result in taxable persons carrying out transactions treated as deemed intra-Community supplies and deemed intra-Community acquisitions in the Member State of dispatch and arrival, respectively.
…and deemed intra-Community acquisitions in the Member State of dispatch and arrival, respectively. As a result, they must be identified for VAT in all Member States where they carry out these types of activities and, in addition, they must declare the transactions in VAT returns and recapitulative statements in all these countries. As expressed in the above paragraph, we consider the measure to be a good initiative to reduce the administrative burden that many businesses are confronted with. However, we believe that a number of adjustments need to be made to the current and to the proposed VAT rules in order for the initiative to have the desired effect. As the system works under the current rules, transfers of own goods are deemed as intra-Community supplies of goods.
As the system works under the current rules, transfers of own goods are deemed as intra-Community supplies of goods. In other words, they are exempt from VAT to the extent that two conditions are met, namely the existence of a transport of the goods between the territory of two Member States and the existence of a VAT number assigned by the administration of a Member State other than that of the departure of the goods. These conditions are laid down in Article 138 of the VAT Directive. If the new scheme is intended to avoid multiple VAT identifications in different Member States, but at the same it is needed to maintain the VAT exemption for transfers of own goods, the text of Article 138 of the VAT Directive needs to be amended to reflect this.
…exemption for transfers of own goods, the text of Article 138 of the VAT Directive needs to be amended to reflect this. In the proposal presented on 8 December, it is proposed to amend the text of Article 138 of the VAT Directive but only with effect from 1 January 2028 to bring it into line with the Digital Reporting Requirements (DRR). The text is not amended with effect from 1 January 2025, when the special scheme for transfers of own goods is scheduled to enter into force. If from that date onwards VAT taxable persons may not have VAT numbers in Ref. Ares(2023)2153162 - 24/03/2023 the Member States where they receive goods as a result of the transfer (this is the aim of the new special scheme), it will not be possible to comply with one of the two essential requirements for the exemption provided for in Article 138 of the VAT Directive.
…comply with one of the two essential requirements for the exemption provided for in Article 138 of the VAT Directive. The above would have the undesirable effect that transfers of goods would be subject to VAT and not exempt in the country of departure of the goods. It is our understanding that the purpose of the new scheme is that taxable persons are to be able to declare transfers of own goods under the new special scheme without the need for VAT identification numbers in different Member States. At the same time, it is needed to safeguard the exemption of the supply. To this end, the requirement for the exemption to apply should be that such taxable persons must register under the special scheme, submit the special returns on a regular basis and comply with the formal obligations arising from the scheme.
…submit the special returns on a regular basis and comply with the formal obligations arising from the scheme. In this sense, Article 138 of the VAT Directive should be amended, with effect from 1 January 2025, to reflect all this. In this sense, we suggest that a new paragraph is added to article 138(2) as follows: “(d) The supply of goods, consisting in a transfer to another Member State, where the taxable person has opted for the special scheme included in Section 5 of Chapter 6 of Title XII of this Directive and whereas the taxable person has submitted the VAT return pursuant to article 369xg and provided that said taxable person is not in one of the situations of exclusion from that special scheme provided for in Article 369xe.” We understand that the above would serve to maintain the exemption of the transfer of own goods in the cases of applying the new special scheme.
…would serve to maintain the exemption of the transfer of own goods in the cases of applying the new special scheme. Recapitulative statements and DRR We understand that there is an additional aspect in relation to this new special scheme for transfers of own goods that should be addressed. We refer to the obligation to submit a recapitulative statement. This recapitulative statement is abolished with effect from 1 January 2028 to be replaced by the DRR through the new wording of Article 262 of the VAT Directive. Following the current rules, transfers of own goods must be declared in the recapitulative statement in accordance with the current wording of Article 262.
…of own goods must be declared in the recapitulative statement in accordance with the current wording of Article 262. Therefore, in order not to duplicate reporting obligations and to minimize the VAT compliance obligations for taxable persons (this is one of the purposes of the special scheme), it should be mentioned that the recapitulative statement will not be required for transfers of own goods covered by the new special scheme. The current wording of Article 262 states that the transfers of own goods referred to in Article 138(2)(c) of the VAT Directive are covered by the recapitulative statement. Since we have proposed that transfers of own goods under the special scheme should be covered by an additional paragraph (d) of said article 138(2), it may seem clear that they should be outside the scope of the recapitulative statements.
(d) of said article 138(2), it may seem clear that they should be outside the scope of the recapitulative statements. However, we suggest emphasizing this to avoid confusion. We suggest that, with effects January 1 2025, the wording of Article 262.1 could add a paragraph (d) stating the following: “(d) taxable persons who have opted for the application of the special scheme included Section 5 of Chapter 6 of Title XII shall not submit a recapitulative statement”. The above will be a relief for the VAT obligations of taxable persons who are under the special scheme for transfers of own goods. However, the above would entail that between 2025 and 2028, transfers of goods will not be declared in a recapitulative statement and only in an OSS return. At the same time, in 2028, transfers of own goods will be declared in the DRR.
…statement and only in an OSS return. At the same time, in 2028, transfers of own goods will be declared in the DRR. This seems to be the case according to the new wording of Article 262 which mentions transfers of goods among the transactions that will be covered by DRR, i.e. the wording proposed does not exclude transfers of own goods covered by the special scheme (it just includes a general mention to “transfer of goods”). This situation will mean that for a period of three years (2025-2028), there will be hardly any information and possibility of control over these transactions as the transfers of own goods will be declared neither in a recapitulative statement nor in the DRR and just in an OSS return.
…of own goods will be declared neither in a recapitulative statement nor in the DRR and just in an OSS return. According to our view, this problem can be solved in two ways: Requiring recapitulative statements for transfers of own goods since January 1 2025 even if they are covered by the special scheme until the DRR enter into force. This does not seem to be a reasonable solution as it goes against the purpose of the rule which is the simplification of VAT formal obligations for taxable persons. If this option is followed, recapitulative statements must be reformulated because at present, the VAT number of the country of destination of the goods must be declared. If the implementation of this special scheme is intended to eliminate these numbers, the content of the recapitulative statement must be reconsidered.
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