Proposal for a COUNCIL DIRECTIVE amending Council Directive 2006/112/EC of 28 November 2006 as regards provisions relating to distance sales of goods and certain domestic supplies of goods
Date: 2018-12-11
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: VAT, electronic commerce, establishment, goods and services, import (EU), supply, tax collection, tax exemption, taxpayer, third country

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   EUROPEAN COMMISSION  Brussels, 11.12.2018  COM(2018) 819 final 2018/0415 (CNS)  Proposal for a COUNCIL DIRECTIVE amending Council Directive 2006/112/EC of 28 November 2006 as regards provisions relating to distance sales of goods and certain domestic supplies of goods  
 
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

• 
On 5 December 2017, the Council adopted Council Directive (EU) 2017/24551 (“the VAT e-
commerce Directive”) amending Directive 2006/112/EC2 (“the VAT Directive”) which, inter 
alia: 

– 

– 

Extends  the  scope  of  the  special  schemes  for  non-established  taxable  persons 
supplying  telecommunications,  broadcasting  or  electronic  services  to  non-taxable 
persons, as defined in Articles 358 to 369k of the VAT Directive (the so-called "mini 
One Stop Shop") to all types of services as well as to intra-Community distance sales 
of  goods  and  distance  sales  of  goods  imported  from  third  territories  or  third 
countries, turning the mini One Stop Shop into a One Stop Shop. The mini One Stop 
Shop  allows  suppliers  of  such  services  to  use  a  web  portal  in  the  Member  State  in 
which they are identified to account for the VAT due in other Member States; 

Introduces  special  provisions  applicable  to  taxable  persons  who  facilitate  certain 
supplies to non-taxable persons made by other taxable persons through the use of an 
electronic interface such as a marketplace, platform, portal or similar means. 

The  objective  of  this  proposal  is  to  lay  down  additional  rules  needed  to  support  these 
amendments to the VAT Directive which apply from 1 January 2021, insofar as such support 
cannot  be  attained  through  implementing  measures  laid  down  in  Council  Implementing 
Regulation  (EU)  No 282/20113  (“the  VAT  Implementing  Regulation”).  This  concerns,  in 
particular, the provisions relating to electronic interfaces facilitating supplies of goods to non-
taxable  persons  in  the  EU  by  taxable  persons  not  established  in  the  EU  and  the  special 
arrangements  for  declaration  and  payment  of  import  VAT  where  the  One  Stop  Shop  for 
distance sales of goods imported from third territories or third countries is not used. 

• 

Consistency  with  existing  policy  provisions  in  the  policy  area  and  with  other 
Union policies 

This  proposal  lays  down  detailed  provisions  required  to  supplement  the  VAT  e-commerce 
Directive which is part of the VAT Action Plan4. 

• 

Consistency with other Union policies 

In addition to the VAT Action Plan, the VAT e-commerce Directive has been identified as a 
key initiative in the Digital Single Market Strategy5 as well as in the Single Market strategy6 
and the E-Government Action Plan7.  

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Council  Directive  (EU)  2017/2455  of  5 December  2017  amending  Directive  2006/112/EC  and 
Directive  2009/132/EC  as  regards  certain  value  added  tax  obligations  for  supplies  of  services  and 
distance sales of goods (OJ L 348, 29.12.2017, p. 7). 
Council  Directive  2006/112/EC  of  28 November  2006  on  the  common  system  of  value  added  tax 
(OJ L 347, 11.12.2006, p. 1). 
Council  Implementing  Regulation  (EU)  No 282/2011  of  15 March  2011  laying  down  implementing 
measures  for  Directive  2006/112/EC  on  the  common  system  of  value  added  tax  (recast)  (OJ L 77, 
23.3.2011, p. 1). 
COM(2016) 148 final – “Towards a single VAT area – Time to decide” 
COM(2015) 192 final. 
COM(2015) 550 final. 
COM(2016) 179 final. 

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2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal is based on Article 113 of the Treaty on the Functioning of the European Union 
(TFEU).  This  article  provides  for  the  Council,  acting  unanimously  in  accordance  with  a 
special legislative procedure and after consulting the European Parliament and the European 
Economic and Social Committee, to adopt provisions for the harmonisation of Member States' 
rules in the area of indirect taxation. 

• 

Subsidiarity (for non-exclusive competence)  

The proposal is addressing certain issues arising from the adoption of the VAT e-commerce 
Directive  which  has  to  be  applied  by  all  Member  States  alike.  The  changes  serve,  in 
particular, to  ensure that  the provisions on electronic interfaces  are  applied in  a harmonised 
way by all Member States in order not to create loopholes that could generate revenue losses.  

The proposal therefore complies with the subsidiarity principle.  

• 

Proportionality 

The proposal is consistent with the principle of proportionality i.e. it does not go beyond what 
is necessary to meet the objectives of the VAT e-commerce Directive and equally the smooth 
functioning of the single market. As with the subsidiarity test, it is not possible for Member 
States to address the issues without a proposal to amend the VAT Directive.  

• 

Choice of the instrument 

The proposal requires amending the VAT Directive. It lays down the specific rules necessary 
for the correct application of certain provisions of the VAT e-commerce Directive, where the 
goals  pursued  cannot  be  reached  through  the  adoption  of  implementing  measures  as  they 
require  amending  basic  provisions  of  the  VAT  Directive.  This  concerns,  in  particular, 
provisions  relating  to  electronic  interfaces  facilitating  supplies  of  goods  in  the  EU  made  by 
taxable  persons  not  established  in  the  EU  and  the  special  arrangements  for  declaration  and 
payment of import VAT where the Import One Stop Shop is not used.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

The Commission undertook several consultation rounds with the Member States' authorities, 
both from the tax administration and the customs administration, within the framework of the 
Group on the Future of VAT. It also met with the businesses concerned both in the framework 
of  the  VAT  Expert  Group  and  at  targeted  meetings  with  electronic  interfaces  and  postal 
operators.  Finally,  a  dedicated  Fiscalis  2020  Workshop  took  place  in  March  2018  in  Malta 
where  representatives of the tax and customs  authorities and the business sectors concerned 
jointly  discussed  the  issues  arising  from  the  implementation  of  the  VAT  e-commerce 
Directive.  

• 

Impact assessment 

An impact assessment was carried out for the proposal which lead to the adoption of the VAT 
e-commerce  Directive.  The  current  proposal  only  amends  what  is  necessary  for  the 
functioning of some of the provisions of that Directive.  

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• 

Regulatory fitness and simplification 

The  main  goal  of  the  proposal  is  to  expand  on  the  provisions  concerning  taxable  persons 
operating  electronic  interfaces  such  as  marketplaces,  platforms  and  portals  facilitating 
supplies  of  goods  in  the  EU  by  taxable  persons  not  established  in  the  EU.  The  proposed 
changes  will further simplify the administrative burden of such taxable persons by allowing 
more transactions to be reported in the One Stop Shop, thus improving the VAT collection. 
These provisions therefore do not have any impact for micro-enterprises or SMEs established 
in the EU.  

4. 

BUDGETARY IMPLICATIONS 

 This proposal has no budgetary implications. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Implementation will be overseen by the Standing Committee on Administrative Cooperation 
(SCAC),  supported  by  its  IT  subcommittee,  the  Standing  Committee  on  Information 
Technology (SCIT)   

• 

Detailed explanation of the specific provisions of the proposal 

Article 14a  inserted  in  the  VAT  Directive  by  the  VAT  e-commerce  Directive  provides  that 
where  a  taxable  person  facilitates,  through  the  use  of  an  electronic  interface  such  as  a 
marketplace, platform or portal either distance sales of goods imported from third territories 
or  third  countries  in  consignments  of  an  intrinsic  value  not  exceeding  EUR 150 
(Article 14a(1))  or  the  supply  of  goods  within  the  Community  by  a  taxable  person  not 
established there to  a non-taxable person (Article 14a(2)), the taxable person  who facilitates 
the supply shall be deemed to have received and supplied the goods himself.  

This effectively splits a business to consumer supply (B2C supply) from the supplier selling 
goods through the use of the electronic interface to the customer into two supplies: a supply 
from  that supplier to  the electronic interface (B2B supply)  and a supply  from  the electronic 
interface to the customer (B2C supply). It is therefore necessary to determine to which supply 
the dispatch or transport of the goods should be ascribed to properly determine their place of 
supply.  Article 1,  point (1)  provides  that  the  dispatch  or  transport  should  be  ascribed  to  the 
supply  from  the  electronic  interface  to  the  customer,  as  also  indicated  in  the  statement 
included in the Council minutes upon the adoption of the VAT e-commerce Directive. 

The  straightforward  application  of  Article 14a(2)  would  create  additional  administrative 
burdens for the companies concerned as well as the risk of VAT revenue losses resulting from 
the payment of VAT by the electronic interface to the supplier selling goods through the use 
of the electronic interface. The following amendments proposed address these issues: 

– 

– 

The  B2B  supply  from  the  supplier  selling  goods  through  the  use  of  the  electronic 
interface  to  the  electronic  interface  is  exempt  (Article 1,  point (2))  with  a  right  for 
that supplier to deduct the input VAT he paid himself in respect of the purchase or 
import of the goods supplied (Article 1, point (3));  

According  to  Article 369b  of  the  VAT  Directive  as  amended  by  the  VAT  e-
commerce Directive, the One Stop Shop can only be used to declare and pay VAT on 
intra-Community distance sales of goods and not for a domestic supply of goods. As 

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suppliers selling goods through the use of an electronic interface may hold a stock of 
goods  in  different  Member  States  from  which  they  make  domestic  supplies, 
electronic  interfaces  deemed  to  have  supplied  those  goods  themselves  would  be 
obliged to register for VAT in all these Member States to account for VAT on these 
domestic  supplies.  This  would  remove  the  simplification  of  the  One  Stop  Shop  for 
electronic interfaces and thus result in additional obligations for them. It is therefore 
proposed to  allow electronic interfaces to use the One Stop  Shop also  for domestic 
supplies to  customers when they are deemed to  supply the goods themselves under 
Article 14a(2)  of  the  VAT  Directive.  This  requires  the  following  changes  to 
Chapter 6 of Title XII of the VAT Directive: 

– 

– 

– 

– 

– 

Amend  the  heading  of  the  Chapter  and  of  its  Section  3  (Article 1,  points (5) 
and (6)); 

Amend  the  definition  of  the  Member  State  of  consumption  (Article 1, 
point (7)(a)); 

Extend the scope of the special scheme (Article 1, point (8)); 

Amend  the  provision  on  the  exclusion  of  a  taxable  person  from  the  special 
scheme (Article 1, point (9)); 

Allow  the  declaration  of  these  domestic  supplies  in  the  One  Stop  Shop  VAT 
return (Article 1, points (10) and (11)). 

Finally,  a  last  amendment  is  proposed  in  the  special  arrangements  for  declaration  and 
payment  of  import  VAT  where  the  One  Stop  Shop  is  not  used  to  declare  VAT  on  distance 
sales of goods imported from third territories or third countries. According to Articles 369y to 
369zb as inserted in the VAT Directive by the VAT e-commerce Directive global payment of 
import VAT must be made to customs by the end of the month following that of importation. 
This payment deadline is however not aligned to the deadline laid down for global payment of 
the customs debt in Article 111 of the Union Custom Code, providing for deferred payment 
until  the  middle  of  the  month  following  the  month  of  importation.  With  this  proposal,  the 
deadline for deferred payment under these special arrangements is aligned with that provided 
for in the Union Customs Code8 (Article 1, point (12)). 

Article 2  provides  that  the  measures  shall  apply  from  1 January  2021,  which  is  the  date  of 
application of the relevant provisions of the e-commerce Directive. 

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OJ L 269, 10.10.2013, p. 1. 

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2018/0415 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Council Directive 2006/112/EC of 28 November 2006 as regards provisions 
relating to distance sales of goods and certain domestic supplies of goods 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 113 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Parliament1, 
Having regard to the opinion of the European Economic and Social Committee2,  

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

Council  Directive  2006/112/EC3  as  amended  by  Council  Directive  (EU)  2017/24554  
provides  that  where  a  taxable  person  facilitates,  through  the  use  of  an  electronic 
interface such as a marketplace, platform, portal or other similar means, distance sales 
of  goods  imported  from  third  territories  or  third  countries  in  consignments  of  an 
intrinsic value not exceeding EUR 150 or the supply of goods within the Community 
by a taxable person not established within the Community to a non-taxable person, the 
taxable  person  who  facilitates  the  supply  shall  be  deemed  to  have  received  and 
supplied the goods himself. As this provision splits a single supply into two supplies, it 
is  necessary  to  determine  to  which  of  these  supplies  the  dispatch  or  transport  of  the 
goods should be ascribed in order to properly determine their place of supply.  

(2)  While  a  taxable  person  who  facilitates  through  the  use  of  an  electronic  interface  the 
supply of goods to a non-taxable person in the Community may deduct, in accordance 
with existing rules, the VAT paid to suppliers not established in the Community, the 
risk is that the latter may not pay the VAT to the tax authorities. To avoid that risk, the 
supply  from  the  supplier  selling  goods  through  the  use  of  an  electronic  interface 
should be exempt from VAT while that supplier should be granted the right to deduct 
the  input  VAT  which  it  paid  in  respect  of  the  purchase  or  import  of  the  goods 
supplied. 

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2 
3 

4 

OJ C , , p. . 
OJ C , , p. . 
Council  Directive  2006/112/EC  of  28 November  2006  on  the  common  system  of  value  added  tax 
(OJ L 347, 11.12.2006, p. 1). 
Council  Directive  (EU)  2017/2455  of  5  December  2017  amending  Directive  2006/112/EC  and 
Directive  2009/132/EC  as  regards  certain  value  added  tax  obligations  for  supplies  of  services  and 
distance sales of goods (OJ L 348, 29.12.2017, p. 7). 

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(3) 

(4) 

(5) 

Furthermore, suppliers who are not established in the Community, who make use of an 
electronic interface to sell goods may hold stock in several Member States and may in 
addition to intra-Community distance sales of goods, supply goods from this stock to 
customers in the same Member State. Currently, such supplies are not covered by the 
special scheme for intra-Community distance sales of goods and for services supplied 
by taxable persons established within the Community but not in the Member State of 
consumption. In order to reduce the administrative burden, those taxable persons who 
facilitate  the  supply  of  goods  to  non-taxable  persons  in  the  Community  through  the 
use of an electronic interface, who are deemed to have received and supplied the goods 
themselves, should also be allowed to use this special scheme to declare and pay VAT 
for those domestic supplies.  

To  ensure  consistency  in  terms  of  the  payment  of  VAT  and  import  duty  upon  the 
importation  of  goods,  the  time  period  for  the  payment  of  import  VAT  to  customs 
where  the  special  arrangements  for  the  declaration  and  payment  of  import  VAT  are 
used, should be aligned to that laid down in respect of customs duty in Article 111 of 
Regulation (EU) No 952/2013 of the European Parliament and of the Council5. 

In  accordance  with  the  Joint  Political  Declaration  of  28 September  2011  of  Member 
States  and  the  Commission  on  explanatory  documents6,  Member  States  have 
undertaken  to  accompany,  in  justified  cases,  the  notification  of  their  transposition 
measures  with  one  or  more  documents  explaining  the  relationship  between  the 
components  of  a  directive  and  the  corresponding  parts  of  national  transposition 
instruments. With regard to this Directive, the legislator considers the transmission of 
such documents to be justified. 

(6) 

Directive 2006/112/EC should therefore be amended accordingly, 

HAS ADOPTED THIS DIRECTIVE: 

Directive 2006/112/EC is amended as follows: 

Article 1 

(1) 

in Section 2 of Chapter 1 of Title V, the following Article 36b is added: 

‘Article 36b 

Where  a  taxable  person  is  deemed  to  have  received  and  supplied  goods  in  accordance  with 
Article 14a, the dispatch or transport of the goods shall be ascribed to the supply made by that 
taxable person.’; 

(2) 

the following Article 136a is inserted: 

‘Article 136a 

Where  a  taxable  person  is  deemed  to  have  received  and  supplied  goods  in  accordance  with 
paragraph  2  of  Article 14a,  Member  States  shall  exempt  the  supply  of  those  goods  to  that 
taxable person.’; 

(3) 

in Article 169, point (b) is replaced by the following: 

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6 

Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying 
down the Union Customs Code (OJ L 269, 10.10.2013, p. 1). 
OJ C 369, 17.12.2011, p. 14. 

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‘(b) 

transactions  which  are  exempt  pursuant  to  Articles 136a,  138,  142  or  144, 
Articles 146  to  149,  Articles 151,  152,  153  or  156,  Article 157(1)(b), 
Articles 158 to 161 or Article 164;’; 

(4) 

in paragraph 1 of Article 204, the third subparagraph is replaced by the following: 

‘However, Member States may not apply the option referred to in the second subparagraph to 
a taxable person within the meaning of point (1) of Article 358a, who has opted for the special 
scheme for services supplied by taxable persons not established within the Community.’; 

(5) 

the heading of Chapter 6 of Title XII is replaced by the following: 

‘Special schemes for taxable persons supplying services to 
non-taxable persons, making distance sales of goods and certain 
domestic supplies of goods’; 

(6) 

the heading of Section 3 in Chapter 6 of Title XII is replaced by the following: 

‘Special scheme for intra-Community distance sales of goods, for supplies 
of goods within a Member State made by electronic interfaces facilitating 
those supplies and for services supplied by taxable persons established 
within the Community but not in the Member State of consumption’; 

(7) 

(a) 

Article 369a is amended as follows: 

in the first paragraph, point (3) is replaced by the following: 

‘(3) 

‘Member State of consumption’ means one of the following:  

(a) 

(b) 

(c) 

in the case of the supply of services, the Member State in which the supply is 
deemed to take place according to Chapter 3 of Title V; 

in  the  case  of  intra-Community  distance  sales  of  goods,  the  Member  State 
where the dispatch or transport of the goods to the customer ends; 

in the case of the supply of goods made by an electronic interface facilitating 
those  supplies  in  accordance  with  paragraph  2  of  Article 14a  where  the 
dispatch  or  transport  of  the  goods  supplied  begins  and  ends  in  the  same 
Member State, that Member State.’; 

(b) 

the following third paragraph is added: 

‘Where a taxable person has not established his business in the Community and has no fixed 
establishment  therein,  the  Member  State  of  identification  shall  be  the  Member  State  from 
which the goods are dispatched or transported. Where there is more than one Member State 
from  which  goods  are  dispatched  or  transported,  the  taxable  person  shall  indicate  which  of 
those Member States shall be the Member State of identification. The taxable person shall be 
bound by this decision for the calendar year concerned and the two calendar years following.’; 

(8) 

Article 369b is replaced by the following: 

Member States shall permit the following taxable persons to use this special scheme: 

(a) 

a taxable person carrying out intra-Community distance sales of goods; 

‘Article 369b 

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(b) 

(c) 

a taxable person facilitating the supply of goods  in accordance with paragraph 2 of 
Article 14a  where  the  transport  of  the  goods  supplied  begins  and  ends  in  the  same 
Member State; 

a  taxable  person  not  established  in  the  Member  State  of  consumption  supplying 
services to a non-taxable person.  

This special scheme applies to all those goods or services supplied in the Community by the 
taxable person concerned.’; 

(9) 

‘(a) 

in Article 369e, point (a) is replaced by the following: 

if he notifies that he no longer carries out supplies of goods and services covered by 
this special scheme;’; 

(10) 

Article 369f is replaced by the following: 

‘Article 369f 

The taxable person making use of this special scheme shall submit by electronic means to the 
Member  State  of  identification  a  VAT  return  for  each  calendar  quarter,  whether  or  not 
supplies  of  goods  and  services  covered  by  this  special  scheme  have  been  carried  out.  The 
VAT return shall be submitted by the  end of the month following the end of the tax period 
covered by the return.’; 

(11) 

in Article 369g, paragraphs 1 and 2 are replaced by the following: 

The VAT return shall show the VAT identification number referred to in Article 369d 
 ‘1. 
and, for each Member State of consumption in which VAT is due, the total value exclusive of 
VAT, the applicable rates of VAT, the total amount per rate of the corresponding VAT and 
the total VAT due in respect of the following supplies covered by this special scheme carried 
out during the tax period:  

(a) 

intra-Community distance sales of  goods  and supplies of  goods in  accordance  with 
paragraph 2 of Article 14a where the dispatch or transport of those goods begins and 
ends in the same Member State; 

(b) 

supplies of services. 

The VAT return shall also include amendments relating to previous tax periods as provided in 
paragraph 4 of this Article.  

2. 
Where  goods  are  dispatched  or  transported  from  Member  States  other  than  the 
Member  State  of  identification,  the  VAT  return  shall  also  include  the  total  value  of  the 
following supplies covered by this special scheme, for  each Member State where  goods are 
dispatched or transported from: 

(a) 

(b) 

intra-Community  distance  sales  of  goods  other  than  those  made  by  an  electronic 
interface in accordance with paragraph 2 of Article 14a; 

intra-Community distance sales of goods and supplies of goods where the dispatch or 
transport  of  those  goods  begins  and  ends  in  the  same  Member  State,  made  by  a 
taxable person in accordance with paragraph 2 of Article 14a.  

In  relation  to  the  supplies  referred  to  in  point  (a),  the  VAT  return  shall  also  include  the 
individual  VAT  identification  number  or  the  tax  reference  number  allocated  by  each  such 
Member State. 

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In  relation  to  the  supplies  referred  to  in  point  (b),  the  VAT  return  shall  also  include  the 
individual  VAT  identification  number  or  the  tax  reference  number  allocated  by  each  such 
Member State, if available. 

The VAT return shall include the information  referred to  in  this paragraph broken down by 
Member State of consumption.’; 

(12) 

in Article 369zb, paragraph 2 is replaced by the following: 

‘2. Member States shall require that the VAT referred to in paragraph 1 is payable monthly. 
The  deadline  for  payment  is  that  applicable  to  the  payment  of  the  import  duty  in  similar 
situations.’. 

Article 2 

1. 
Member States shall adopt and publish, by 31 December 2020 at the latest, the laws, 
regulations and administrative provisions necessary to comply with this Directive. They shall 
forthwith communicate to the Commission the text of those provisions. 

They shall apply those measures from 1 January 2021. 

When Member States adopt those measures, they shall contain a reference to this Directive or 
be  accompanied  by  such  a  reference  on  the  occasion  of  their  official  publication.  Member 
States shall determine how such reference is to be made. 

Member States shall communicate to the Commission the text of the main provisions 

2. 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 3 

This Directive is addressed to the Member States. 

Done at Brussels, 

Article 4 

For the Council 
The President 

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