|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.