Back in 2015, the Commission set out in its 2016 Work Programme, its intention to withdraw a number of VAT proposals that have made little progress in the Council or where their significant simplification potential has been unacceptably watered down. A list of withdrawn proposals has now been published in the Official Journal and this includes a proposal for a standard VAT return and a proposal regarding the treatment of insurance and financial services.
The earlier reasoning for their withdrawal are:
Proposal for standard VAT return – “Negotiations have resulted in a draft compromise text that has fully denatured the substance of the Commission proposal. In particular, the latest developments have run counter to the simplification, harmonisation and substantial burden reduction objectives of the Commission proposal.”
Proposal regarding the treatment of insurance and financial services – “The proposal dates from 2007 and no agreement is foreseen (no Council Presidency has recently taken up discussions).”
The withdrawal of the proposal for a standard VAT return highlights the practical difficulty in gaining agreement across 28 Member States. Whilst all were probably supportive of the idea, it would appear that problems stemmed from the unwillingness of Member States to give up information they currently collect. Of greater importance is the official end of the negotiations on the treatment of insurance and financial services.
The list of withdrawn proposals can be found here.