MittelstandTalks 2 - Small Business Associations urge Europe to introduce threshold on VAT for digital sales

Brussels, 25.5.2016 - “We welcome to reboot the current EU VAT system to make it simpler and more business-friendly”, stated the President of European Entrepreneurs CEA-PME and of Bundesverband Mittelständische Wirtschaft (BVMW), Mario Ohoven, at the 2nd #MittelstandTalks in Brussels on 25th May at Residence Palace International Press Centre.

The new VAT action plan proposed by the European Commission (EC) in April raises concerns among major European associations for Small and Medium sized Enterprises (SME) and Self-Employed Professionels. The European Forum of Independent Professionals (EFIP), the European Federation of Umbrella Companies (FEPS), the European Small Business Alliance (ESBA) and European Entrepreneurs CEA-PME adressed an open letter to Prime Minister Mark Rutte to simplify SMEs life in the Single Market.

“The new EU legislation on VAT for cross-border digital sales will be disproportionately burdensome for small businesses. This is largely due to financial and time-wise compliance costs, which will have to be passed on to customers or absorbed internally. This would lead to a reduction in their profits, and will prevent them from expanding their business across Europe”, underlined Professor Maurizio Casasco President of CONFAPI (Italy) and Vice-President of CEA-PME (left in the photo below, with MEP Herbert Dorfmann (SVP/EPP), MEP Massimiliano Salini (FI/EPP) and Mario Ohoven).

European Entrepreneurs CEA-PME's Managing Director, Stefan Moritz (in the photo below), recalled the facts already mentioned in the letter to the Dutch Preisdency and the ECOFIN Council: "Already today thousands of micro- and small enterprises withdraw from online sales and will loose the chance to take profit from the Digital Revolution. This will be all of advantage for the big players in the field, like Amazon & Co. And both facts can not be the interest of the EU."

Professor Roland Wöller, Federal General Manager BVMW and former State Minister of Saxony, called on the EU institutions to introduce an exemption of the new EU VAT rules on digital sales for those smallest businesses trading below a certain turnover threshold.

Greek MEP Eva Kaili, Head of the Hellenic S&D Delegation and president of the EP delegation for relationship with the NATO (in the photo below), asked for coordinate action in the EU. “We have to have harmonisation and simply rules for SMEs, and relieve the burden from consumers”.

David Caro, president of ESBA, that participated to the MittelstandTalks with a delegation including the National Councillor of the UK Federation of Small Businesses Micheal Mealing and Patrick Gibbels, Secretary General of ESBA, underlined how the EC's "Mini one-stop shop" system for the old intra-comunitarian VAT rules was working pretty well after years of practice and adaptation, and now with the new rules since 2015, procedures have become unacceptably complicated.

A comprehensive VAT simplification package for SMEs will be presented in December 2016, announced Donato Raponi, Head of Unit "Value Added Tax" from the European Commission (in the photo below). “I see a high probability that a threshold will be proposed”. But at the end of the day the Member States have to decide unanimously. This will be the biggest hurdle to overcome in 2017.

Please download here the letter to the Dutch Presidency and the ECOFIN Council, as well as the related press release (kindly prepared by Marco Torregrossa, Secretary General of EFIP).


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