Hi ,
European commissioners have said a minimum threshold to comply with controversial new EU VAT rules on digital products and services will not
be introduced.
UK MEPs pushed for a EU-wide minimum turnover limit in line with the law in the UK that means companies that turnover less than £81,000 do not need to register for
VAT.
The call was in response to new regulations which require companies selling digital products and services to charge VAT at the rate applicable in the EU country in which they are purchased.
Companies can register for HMRC's VAT Mini One Stop Shop and do not need to impose VAT if they are not already doing so but campaigners say micro businesses are still struggling to cope with the red tape involved including claims that some companies have been forced to shut down.
However, European commissioner Pierre Moscovici said a threshold will not be introduced.
In his response to the issues, he said "the idea of having a minimum
threshold was discussed in council at the time these rules were negotiated but this was firmly rejected by member states.
"Microbusinesses can still enjoy the benefit of their VAT exemption threshold for domestic supplies and this is the case in the UK, where businesses with turnover below the threshold of £81,000 can still enjoy the VAT exemption benefit for their domestic supplies."
Earlier this week the government released details of its new 'vision for the EU single digital market'. Included was: "In addition to a single point for VAT registration and guidance, consideration should be given to a single cross-border VAT threshold below which businesses should not have to pay VAT or file a VAT
return."
Noel Guilford