On 18 December, the European Commission has put forward a proposal to update the decision-making process for interpreting VAT rules. The proposal, which is part of the Commission’s Action Plan of 15 July 2020, focuses on changing the VAT Directive (Directive 2006/112/EC) in order to create a committee that would oversee the adoption of implementing acts in certain areas of VAT by the Commission. The so-called comitology procedure 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.
According to information from several newspapers, the Portuguese Presidency of the Council, that will start its mandate on 1 January 2021, aims to reach an agreement on the proposal for public Country-by-Country Reporting. Several MEPs had unsuccessfully asked to the German Presidency to include the file on the agenda of the Competitiveness Council and they have recently written to the future Portuguese Presidency with the same request. The MEPs believe that, now that Austria has changed its view on the dossier, the majority required in the Council to adopt the file is within reach.
On 17 December, the Court of Justice of the European Union (CJEU) confirmed that the VAT Directive precludes national legislation which exempts from VAT the supply of heat by an association of residential property owners to its members. An association of residential property owners and co-owner operates a cogeneration power unit on land belonging to its members (WEG Tevesstraße) and supplies the electricity produced to an energy distribution company, though the heat produced is supplied to its members. The local tax authority refused the deduction of input VAT on the ground that the supply of heat by an association to its members is a transaction that is exempt from VAT under the German law on turnover taxes. The Finanzgericht Baden-Württemberg (Finance Court, Baden-Württemberg, Germany), hearing the action brought by the WEG Tevesstraße asked the CJEU, which confirmed that the VAT Directive applies in the present case and that the supply of heat in question is a supply of property that is subject to VAT.
On 14 December, Gerassimos Thomas (DG TAXUD Director-General) and Kunio Mikuriya (Secretary General of the World Customs Organisation - WCO) signed an agreement by which the Customs Laboratories European Network (CLEN) was recognised as the WCO Regional Customs Laboratory for Europe. The CLEN aims to ensure that customs laboratories can analyse all types of goods and give a valid scientific opinion. It also organises seminars, training courses, proficiency tests to evaluate the performance of laboratories and maintains the databases needed by the laboratories in their day-to-day work.
From 1 January 2021, two European countries, UK and Italy, will hold respectively the Presidency of the G7 and the G20. Prime Minister Boris Johnson stated that the UK will use its presidency of the G7 to heal divisions caused by the global coronavirus pandemic. The agenda of the Italian Presidency of the G20 will rotate around three pillars: People, Planet and Prosperity. It will focus on eradicating poverty and tackling inequality while promoting a transition towards renewable energies and a green recovery. The Italian Presidency shall also target the use of digital tools to achieve prosperity and better quality of life by reducing the digital divide, promoting infrastructural developments and achieving adequate and widespread digital literacy.
