European Commission 1 December 2016, Proposal for a COUNCIL DIRECTIVE amending Directive 2006/112/EC and Directive 2009/132/EC as regards certain value added tax obligations for supplies of services and distance sales of goods

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This European Commission proposal (COM(2016) 757 final) amends Directive 2006/112/EC and Directive 2009/132/EC to modernise VAT rules for cross-border business-to-consumer (B2C) e-commerce, based on Article 113 TFEU, addressing competitive distortions, compliance burdens, and estimated annual revenue losses of EUR 5 billion. Key provisions include: (i) extension of the Mini One Stop Shop (MOSS) from 2021 to cover intra-Community distance sales of goods and services beyond electronic services, and to distance sales of goods imported from third countries in consignments not exceeding EUR 150; (ii) introduction from 2018 of a EUR 10,000 Community-wide threshold below which micro-businesses remain subject to VAT in their Member State of establishment; and (iii) removal, with effect from 1 January 2021, of the existing VAT exemption for small consignments of negligible value under Directive 2009/132/EC. The proposal is projected to reduce VAT compliance costs for businesses by EUR 2.3 billion annually and increase Member State VAT revenues by EUR 7 billion per year from 2021.AI