Ansip is a new entry this year
Free trade is a core principle of the European Union (EU)
and the European Commission (EC) has always made efforts to
expand intra-EU trade. Online trade brings with it both
opportunities for greater trade between member states, and for
Just 4% of online trade in the EU is cross-border from
another member state, with 42% remaining within national
borders and a staggering 54% coming from the US. To increase
the intra-EU share of the pie, former two-term Estonian Prime
Minister Andrus Ansip has been tasked with creating a Digital
Single Market (DSM).
International Tax Review: The release of the DSM
strategy is surely your team's greatest achievement of the last
year. Which aspects of it are you most proud of?
Andrus Ansip: Yes indeed, only a few months after the new
Commission started its work, we presented our strategy to
create a DSM. We need to act quickly, as we are losing out on
unexploited potential. According to a study by the European
Parliament, a DSM could contribute €415 billion ($451
billion) per year to our economy and create hundreds of
thousands of new jobs. We need to break down the many barriers
which remain in our online environment. People and businesses
miss out on goods and services and have their horizons limited
by 28 fragmented markets in the EU. Think about e-commerce:
only 15% of consumers buy online from other EU countries, and
only 7% of SMEs sell cross-border. It is too complicated, too
expensive, too risky. Many startups leave Europe to scale up on
other continents: this is simply not acceptable.
Our strategy is based on three pillars which are equally
important: (1) better access for consumers and businesses to
digital goods and services across Europe; (2) creating the
right conditions and a level playing field for digital networks
and innovative services to flourish; (3) maximising the growth
potential of the digital economy.
One of the initiatives under the first pillar is related to
VAT: we want to reduce the administrative burden businesses
face from different VAT regimes: so that sellers of physical
goods to other countries also benefit from single electronic
registration and payment; and with a common VAT threshold to
help smaller start-ups selling online.
In total, 16 initiatives will be presented by the end of
this year. We presented our first proposals in December 2015.
The new rules on digital contracts aim to better protect
consumers who buy digital content or goods online across the EU
and help businesses expand their online sales with a common and
complete set of consumer protection rules across the EU. The
other proposal will ensure that Europeans who have purchased
films, series, sports broadcasts, games or e-books online while
at home can access them when they travel across the EU.
Together with this proposal, we outlined an action plan to
modernise EU copyright rules.
In parallel to these proposals, we also reached key
agreements with the European Parliament and member states on
ending roaming charges and on new net neutrality rules, on a
stronger data protection framework and on the first EU-wide
ITR: What work needs to be carried out in 2016 to
realise your aim of a VAT reform for B2C retailers by
AA: Working together with my colleague Commissioner
Moscovici, our objective is to make a proposal to the European
Council in the second half of this year which will include a
package of measures to modernise cross-border e-commerce for
business and consumer transactions of both goods and services.
The work on the proposal is advancing well. In September last
year, the Commission, together with Irish Revenue, organised a
conference [attended by ITR] with representatives of
member states and of businesses, large and small, to discuss
the details of the DSM initiative. One of the key outcomes of
this conference was that the vast majority of businesses and
member states were positively disposed to the VAT initiative in
the DSM strategy. Further, we have just completed the open
public consultation which attracted more than 370 submissions.
The next step is to prepare the impact assessment which will
also assess the implementation of the 2015 changes, and then
prepare the legislation. This work is being overseen by the DSM
project team which I am chairing.
ITR: The implementation of the destination
principle for VAT on cross-border B2C e-commerce,
telecommunications and broadcasting brought with it calls for a
threshold. You were one of the more vocal supporters of such a
threshold – why do you think this issue is so
important, and what do you think the chances are of a threshold
being agreed in 2016?
AA: As a first point, it should be recognised that the mini
one-stop shop (MOSS) is a substantial simplification –
more than €3 billion was collected through it in 2015 and
independent consultants have estimated that this mechanism
saved businesses more than €500 million in its first year.
As regards the threshold, it is regrettable that member states
did not provide for this in the 2015 changes despite support by
the Commission and a number of member states, such as the
In the DSM Strategy, the Commission committed to including a
threshold and perhaps other simplification measures for small
business in the VAT e-commerce proposal. The level of this
threshold will be determined on the basis of an economic impact
assessment. I understand why some member states are reluctant
to introduce a threshold as they are concerned that they will
lose VAT revenues and that differences in VAT rates may put
their own business at a disadvantage to suppliers from other
member states. However, I maintain my position that a suitable
threshold and other simplification measures would be positive
overall for small business without distorting the single
ITR: What else will you be working on in
AA: It will be a busy year. After important preparatory work
done last year – we launched more than 10 public
consultations – we will present all the remaining
initiatives included in our strategy.
One of our objectives is to come with a package to further
boost e-commerce in spring. It will include measures to tackle
unjustified geo-blocking, make parcel delivery more efficient
and review our rules on consumer protection cooperation.
Our DSM strategy is forward-looking, paving the way for
future innovations. We want to ensure a thriving digital
economy and society in the long-term, this is why the third
'pillar' of our strategy notably focuses on data,
interoperability and digital skills. Data is a catalyst for
economic growth, innovation and digitisation across all
economic sectors, particularly for startups and for society as
a whole. Education and digital skills are crucial for Europeans
to create new technologies and benefit from them.
Once all our initiatives are on the table, I count on the
support of the European Parliament and member states to agree
on them quickly. As I said, there is no time to waste if we
want European citizens and businesses to make the most of the