On 11 September 2018, the European Parliament adopted, by a large majority, the report for the opinion drafted by MEP Vandenkendelaere (EPP, Belgium) on measures to simplify the VAT for small and medium-sized enterprises. The report suggests that the simplification measures could be implemented before the definitive VAT system comes in, proposing to bring forward the application date to 31 December 2019, instead of 30 June 2022. Furthermore, the MEPs proposed to authorise SMEs to use the VAT exemption threshold currently applicable, for an extra two years (rather than one year) as long as their turnover does not exceed the national threshold applicable to SMEs by more than 33% during these two years (as opposed to 50% proposed by the Commission).
At a joint press conference upon his arrival in Vienna on 8 September, the French finance minister Bruno Le Maire raised the subject of the taxation of digital services. The so-called interim tax proposed by the European Commission on 21 March 2018 is set to tax at 3% the gross revenues of the activities of digital platforms. During his speech, Mr Le Maire proposed to “introduce a sunset clause in the proposal of the Commission so that as soon as there will be a decision at the level of the OECD, the solution of the OECD members will replace the European solution”. The proposal seems to have gathered the attention of several Member States, who were initially opposing the proposal, favouring a global agreement at OECD level. Netherlands, the United Kingdom and Luxembourg are now prepared to get behind a scheme based on a sunset clause. Italy took position in favour of this solution, while the position of Germany is still vague. However, it is worth noting that some states are still opposed to the taxation of digital services, including Ireland, Sweden and Denmark, while Finland and Malta have expressed scepticism, hoping to push forwards at OECD level.
On 11 September 2018, representatives of the European Commission and the OECD attended a hearing of the TAX3 committee of the European Parliament in Strasbourg. Mr Bart Van Raaij and Mr Eduard Folch Sogas from TAXUD reassuring as to the temporary nature of the proposal for a 3% tax on the turnover of the activities carried out by digital platforms. Eric Robert, of the OECD expressed an optimistic position towards the discussion taking place at OECD level, stating that countries like the United States that so far have been blocking any progress, are now open to discussion about the taxation of the digital economy. He also expressed his positivity towards the sunset clause recently proposed by France with regards to the interim tax. The reaction of MEP Pervenche Berès (S&D) was less positive: she called upon the OECD to build on the Commission’s proposal, rather than trying to torpedo it.