VAT: More flexibility on VAT rates, less red tape for small businesses
The European Commission has today proposed new rules to give Member States more flexibility to set Value Added Tax (VAT) rates and to create a better tax environment to help SMEs flourish. Today’s proposals are the final steps of the Commission’s overhaul of VAT rules, with the creation of a single EU VAT area to dramatically reduce the €50 billion lost to VAT fraud each year in the EU, while supporting business and securing government revenues. The EU’s common VAT rules, agreed by all Member States in 1992, are out of date and too restrictive. They allow Member States to apply reduced VAT rates to only a handful of sectors and products. At the same time, EU countries consider VAT rates as a useful instrument to pursue some of their political objectives. The Commission is now making good on its pledge to give Member States more autonomy on rates. Countries will be on a more equal footing when it comes to some existing exceptions to the rules, known as VAT derogations. The Commission is today also addressing the problem of smaller companies suffering from disproportionate VAT compliance costs. A full press release, MEMO and factsheets (on rates and SMEs) can be found online.
Banking Union: First Progress Report on the tackling of non-performing loans to support the risk-reduction agenda
The European Commission has welcomed the headway made in tackling non-performing loans (NPLs) in the EU as part of ongoing work at the national and EU level to reduce remaining risks in parts of the European banking sector. In its First Progress Report since the Finance Ministers agreed an Action Plan on reducing non-performing loans (NPLs), the Commission highlights the further improvement in NPL ratios and forthcoming measures to bring NPL stocks down further. Reducing NPLs is important for the smooth functioning of the Banking Union and the Capital Markets Union, and for a stable and integrated financial system in the EU. Addressing high stocks of NPLs and preventing their possible future accumulation is essential to strengthen and cement economic growth in Europe. Households and companies depend on a strong and crisis-proof financial sector to get financing. While individual banks and Member States are in the driving seat when it comes to tackling their stocks of NPLs, there is a clear EU dimension given the potential spill-over effects to the EU economy as a whole. A full press release, MEMO and factsheet can be found online.
Future of Europe: President Juncker appoints members to Task Force on Subsidiarity and Proportionality
Today, European Commission President Jean-Claude Juncker appointed six members to the ‘Task Force on Subsidiarity, Proportionality and “Doing Less More Efficiently”‘ under the Chairmanship of First Vice-President Frans Timmermans. The Task Force will identify policy areas where work could be devolved or definitely returned to Member States, as well as ways to better involve regional and local authorities in EU policy making and delivery. President Juncker said: “The European Commission must be big on the big things, and act only where it can achieve better results than Member States acting alone. This was my message when I was campaigning to become President of this Institution and it was the message delivered by the leaders of the EU27 in the Rome Declaration in March 2017. The new Subsidiarity and Proportionality Task Force will help us to decide which powers can be better exercised at a national or local level, and respond to citizens’ expectations to take care of the concerns that really matter to them.” First Vice-President Timmermans added: “This Commission has really pushed better regulation so that we are ambitious where we must be, and modest wherever we can be. We do this on the basis of the latest evidence and broad public consultation. We need to continue this work and explore where the EU can really add value more efficiently but also empower Member States to do all that they can do better themselves. This Task Force will do exactly that.” The members of the Task Force are all politicians: Toomas Vitsut, Reinhold Lopatka, Kristian Vigenin, Karl-Heinz Lambertz, Michael Schneider and François Decoster. The Task Force will meet for the first time before the end of January and present its report by 15 July. The creation of the Task Force was most recently welcomed by Irish Prime Minister Leo Varadkar in a debate on the Future of Europe in the European Parliament on Tuesday 17 January.A full press release can be found online.
Launch of EU-China Tourism Year 2018
Tomorrow, and following the announcement made by Commission President Jean-Claude Juncker and the Chinese Premier Li Keqiang in July 2016, the EU-China Tourism Year (ECTY) will be launched at the Doge’s Palace in Venice. This initiative provides a unique opportunity to increase the number of visits, promote sustainable tourism, stimulate investment opportunities for Europe and China, improve air connectivity and underpin the ongoing negotiations on EU-China visa facilitation. The year will be opened by the Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, Elżbieta Bieńkowska, European Parliament President Antonio Tajani, the Bulgarian Minister of Tourism representing the Presidency of the Council of the European Union, Nikolina Angelkova, the Italian Minister of Cultural Heritage and Activities and Tourism, Dario Franceschini, the Vice-Chairman of the CPPCC National Committee, Mr Qi Xuchun, and the Vice-Chairman of the China National Tourism Administration, Du Jiang. The EU-China Tourism Year will consist of a number of cooperative marketing campaigns funded through public-private partnerships, business summits, and business-to-business meetings for tourism operators funded by the COSME programme. On the EU side, the aim is to lead to an annual increase of 10% of Chinese visitors, representing at least €1 billion each year for the EU tourism industry, and an estimate of 200 partnership agreements between EU and Chinese companies. The ECTY is a concrete manifestation of EU cultural diplomacy in the framework of the EU-China strategic partnership. The initiative is also in line with the EU Strategy on China adopted in 2016. It is a way to develop a better understanding between European and Chinese people, contributing to the “High Level EU-China People-to-People Dialogue” and the 2018 European Year of Cultural Heritage. The opening ceremony will be followed by the first EU-China Tourism Business Summit. After the launch event a press conference will take place. Media are invited to sign up here. Further information is available on the dedicated ECTY website.
Competition: Commission welcomes new rules that benefit consumers by promoting more competition in processing of card payments
The European Commission has issued new requirements that ensure independence of payment card schemes and processing entities, to enhance competition in the card payment market. When a consumer pays with a card in a shop or online, the transaction needs to be processed for the payment to be transferred to the shop’s bank account. This service is carried out by processing companies, which manage the necessary communication and IT processes for the payment to be finalised. Payment card schemes often provide their own services for the processing of payment transactions and therefore compete with many other independent companies that also provide the same processing services. Under the 2015 Interchange Fee Regulation card schemes must ensure the independence of their own processing activities from the rest of their operations. The new rules introduce detailed requirements concerning the separation of certain functions, which enter into effect on 7 February 2018. As a result of this separation, retailers will be able to choose the best processor for their card transactions, while consumers benefit from reduced processing costs in their daily payments in shops, restaurants, on-line or via a growing range of card-based mobile payment applications. Commissioner Margrethe Vestager, in charge of competition policy, said: “Many consumers use payment cards every day in shops or online. The Interchange Fee Regulation has capped fees charged by the banks for these card payments, which are ultimately paid by consumers. The new rules will bring more competition to the processing of card payments, which should further reduce costs to the benefit of consumers and retailers.” A full press release is available here
Mergers: Commission clears acquisition of Sport Zone and JDSH by JD, Balaiko and Sonae MC
The European Commission has approved, under the EU Merger Regulation, the acquisition of SDSR- Sports Division SR, S.A. (“Sport Zone”) of Portugal by JD Sprinter Holdings 2010, SL (“JDSH”) of Spain and the simultaneous acquisition of joint control of JDSH by JD Sports Fashion Plc (“JD”) of the UK, Balaiko Firaja Invest, S. L (“Balaiko”) of Spain and Sonae MC- Modelo Continente, SGPS, S.A. (“Sonae MC”) of Portugal. Sport Zone and JDSH are active in the retail trade of sports goods in Portugal and Spain under the brands “Sport Zone” (in the case of Sport Zone) and “JD”, “Sprinter”, “Size?” and “Athlete’s Foot”. JD is active in the retail of sports apparel and footwear worldwide and also operates fitness centres in the UK. Balaiko is an investment vehicle company. Sonae MC is active in the retail and wholesale trade in food and non-food products as well as in the management of related real estate assets. The Commission concluded that the proposed acquisition would raise no competition concerns because the local horizontal overlaps between the companies’ activities are moderate, the market shares increments are small, and the joint venture will face competition from the market leader and other players with a regional and national footprint both in Spain and in Portugal. The transaction was examined under the normal merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.8710.
Commissioner Gabriel in Slovenia to discuss Digital Single Market
Commissioner for the Digital Economy and Society Mariya Gabriel is in Ljubljana, Slovenia today. She will discuss the progress made regarding the Digital Single Market strategy as well as the most recent EU digital initiatives to build European supercomputers and to tackle the spread of disinformation online. This morning she met with Members of the Slovenian Parliament. Their exchanges focussed, among other things, on the development of public e-services. Commissioner Gabriel took part in aCitizens’ Dialogue at the University of Ljubljana, with Boris Koprivnikar, Minister of Public Administration, Vice-President of the Government for Slovenia responsible for the digital transformation, where the focus was also on the Digital Single Market. The debate touched upon the importance of digital skills, the transformation of the European labour market, women in tech, and research and innovation. The Commissioner emphasised in her first Citizens’ Dialogue: “Europe’s digital revolution should be inspired by people: students, workers, entrepreneurs, researchers, women and men of all ages, who want to lead secure and stable lives in an inclusive Europe that protects its citizens and defends the democratic values and principles that we hold so dear.” The event can be re-watched here. This afternoon, the Commissioner will hold a working lunch with Minister Koprivnikar and meet with BTC Company as well as with this year’s winner of EU Code Week in Slovenia, Alja Isaković. The Commissioner will highlight the importance of women in tech and encouraging more girls and women to study ICT and work in digital jobs across all sectors.