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| Donato
Raponi was also in the Global Tax 50
2014 |
Donato Raponi ranked fourth in last year's Global Tax 50,
courtesy of the work he and his team in the European
Commission's VAT unit had done in planning and preparing for
the upheaval of VAT across the EU, by implementing the
destination principle.
Since January 1 last year, VAT in the EU has been charged in
the member state of the consumer, rather than the country of
the supplier, on e-services, telecommunications and
broadcasting.
What was most remarkable was not just the ambition of the
changes, but that they were successfully implemented with very
little in the way of technical problems. Raponi talks with
ITR's Joe Stanley-Smith.
International Tax Review: The MOSS system proved
to be a technological success. How was this made possible?
Donato Raponi: The delivery of a successful MOSS system was
the highest priority for the Commission. The roll-out of a new
IT system across 28 member states is indeed very complex and I
am very pleased that this has been successful thus far, and
indeed the reaction of business to the system has been
generally positive.
The reason that the system has worked from day one, and is
perceived as business-friendly, is primarily due to good
planning, a solid legal base and, last but not least, the
commitment and efforts of my Commission colleagues and
officials from member states.
The Commission ensured that detailed technical
specifications were agreed and adhered to, and these efforts
are continuing. Preliminary results from our assessment of the
implementation of the mini one-stop shop (MOSS) is that it has
saved business approximately €500 million ($546 million)
compared to the alternative of direct registration in the
member state of consumption.
ITR: What is the roadmap for its extension to
other services?
DR: Our expectation is that the Commission will bring
forward a proposal to Council in the second half of this year
to extend to B2C supplies of both goods and services. Non-EU
suppliers of goods into the EU, up to the customs threshold per
consignment of €150, will also be able to use the system,
which is a substantial simplification. The Commission has also
announced that it will remove the small consignments exemption
which will raise VAT revenues for member states and level the
playing field for EU businesses.
ITR: How are MOSS registration figures and total
tax take progressing? Do you expect to see awareness of the
2015 changes increasing significantly in the next year?
DR: On your first point, registration figures have been very
positive with more than 12,000 businesses registered for the
scheme, which is in line with expectations. However, many
businesses such as app developers, music labels and so on do
not need to use the system as the tax is accounted for by the
intermediary such as the app or online music store.
As for your second question, I consider that good
communication is critical. The Commission made substantial
efforts in 2014 and 2015 to communicate the 2015 changes with
the result that approximately 70% of eligible business are
using the MOSS rather than registering directly. It is also
notable that revenues from non-EU business have tripled
compared to the 2003 scheme.
It is the intention of the Commission to continue the
communication activities in 2016 to ensure that both EU and
non-EU business are aware of their commitments to pay VAT from
these services in the EU through the business-friendly
MOSS.