Over time, the numerous amendments inserted in the text of the 6th Directive finally make the unstructured text and complex to read. To remedy this state of affairs, the European Commission proposed in 2004 a new text which, in its own words, “codifies the current provisions without modifying the legislation in force. The changes in structure and presentation are aimed only at improving quality. of the text. The substance of the latter is not modified in any way.
Among the subsequent modifications, we note the directive of 12 February 2008 (2008/8 / CE) which modifies, in order to simplify the previous rules, the “place of supply of services” (that is to say the rules of territoriality previously defined by Directive 2006/112 / EC of 28 November 2006 with regard to the provision of services). This directive entered into force on January 1, 2010.
Current situation in the European Union: unfinished harmonization
Although the 6th Directive, to a large extent, the common harmonized system of taxes on sales, many disparities between Member States:
In many areas, the directive leaves the Member States the choice between different options, which necessarily lead to different applications according to national customs and predilections. Using the tax return calculator is essential.
There are differences in interpretation of Community texts between Member States, leading above all to cases of non-taxation or double taxation of the same transaction. In this context, the case law of the Court of Justice of the European Communities has already played – and will continue to play – a standardizing role of prime importance.
- Adaptation of the habits of each country: the Czech Republic had to raise its VAT rates from 5% to 22% on catering and telephone services when it joined the European Union.
- Requests for exemption from governments wishing to use a reduction in VAT to revive economic activity. The Polish Parliament passed shortly before joining a VAT exemption on providing Internet access to individuals who, a priori, seems contrary to the provisions of the 6th
The unpopularity of the Commission in the eyes of taxpayers when their national government cannot directly lower the VAT rate, even if it is the Member States themselves who have unanimously decided to do so!
The wish of member states to be able to freely conduct their fiscal policy, which is frequently recognized as one of the last ramparts of national sovereignty.
Great Solutions Ahead
In order to solve above all the problems mentioned above, the Commission of the European Communities continues to regularly submit draft directives designed to improve the operation of VAT such as making it pay in the country where the goods are marketed and not at the place where it is acquired. These proposals are nevertheless complex to pass, any decision of the Council of Ministers of the European Union requiring the unanimity of the Member States to be adopted. The scope of VAT is defined in two ways: on the one hand by transactions subject to VAT and on the other hand by the rules of territoriality.