On 8 December, the European Commission proposed a series of measures to modernise and make the EU's Value-Added Tax (VAT) system work better for businesses and more resilient to fraud by embracing and promoting digitalisation.
The proposal also aims to address challenges in the area of VAT raised by the development of the platform economy.

According to the latest VAT Gap figures published today, Member States lost €93 billion in VAT revenues in 2020. Conservative estimates suggest that one quarter of the missing revenues can be attributed directly to VAT fraud linked to intra-EU trade. These losses are clearly detrimental to overall public finances at a time when Member States are adjusting budgets to deal with the social and economic effects of recent energy price. In addition, VAT arrangements in the EU can still be burdensome for businesses, especially for SMEs, and other companies who operate or are looking to scale-up cross-border.

Key actions proposed will help Member States collect up to €18 billion more in VAT revenues annually while helping businesses, including SMEs, to grow:

  • A move to real-time digital reporting based on e-invoicing for businesses that operate cross-border in the EU
  • Updated VAT rules for passenger transport and short-term accommodation platforms
  • The introduction of a single VAT registration across the EU for some businesses

Sweden increased its Value Added Tax Registration threshold to SEK 80,000 (approx €7,800) per annum from SEK 30,000. Businesses providing taxable supplies below this threshold may voluntarily opt to register.

The new threshold is applicable from 1 July 2022. 

The change was included in the 2020 budget.  Other VAT changes included:

  • Option to rollover deferred VAT liabilities due to the COVID-19 disruption; payments may be delayed again from current due date of March and April of 2022
  • Shift from 12% to 6% reduced VAT rate for bicycle repairs and clothing
  • Temporary VAT exemption on COVID-19 related supplies
  • Withdrawal of advertising tax from 1 January 2022

The Court of Justice of the European Union (CJEU) has ruled that Member States must accept, as formally submitted, VAT refund requests that contain invoice identifiers other than sequential invoice numbers.

In case C-346/19 (Judgment of 17 December 2020), an Austrian taxpayer’s VAT Refund application was rejected by Germany’s Federal Central Tax Office, on the grounds that the “invoice numbers” listed on the application form were reference numbers rather than sequential invoice numbers.

The Austrian taxpayer challenged the notice, but the tax office ruled that the reference numbers didn’t comply with legal requirements and that the taxpayer had therefore failed to formally submit a valid refund request within the statutory time period allowed.

New Value-Added Tax (VAT) rules for online shopping came into force on 1 July 2021 as part of efforts to ensure a more level playing field for all businesses. Following its introduction, the new framework simplifies VAT compliance in relation to cross-border business-to-consumer e-commerce supplies and introduces greater transparency for EU shoppers when it comes to pricing and consumer choice. It also contributes to a fairer and simpler system of taxation in the EU, and to the modernisation of VAT in line with the realities of the e-commerce market.

On Jan 14, 2021, the ECJ issued the Order in the case C-108/19 (Krakvet sp. z o.o. sp.k.). This case is about the place of supply of B2C supply of goods (E-Commerce) in case the supplier does not arrange the transport.



Unofficial translation/summary:

  • Krakvet is a company established in Poland, which markets feed and accessories for animal husbandry through websites.
  • The activities of that company target customers in several Member States and, for that purpose, it maintains a ‘zoofast’ domain on the Internet for each of those Member States. In particular, sales of products to customers located in Romania are made through the website, the home page of which is www.zoofast.ro.
  • The terms of delivery of products ordered from Krakvet on the Internet are those corresponding, among the international trade clauses established by the International Chamber of Commerce, to the “Ex Works” clause, on departure from Wieliczka (Poland ).
  • With regard to the sales process, buyers place an order on the site www.zoofast.ro. To finalize it on this website, they must choose between two methods of withdrawing the products from the Krakvet warehouse located in Poland. They can choose to withdraw these products themselves from this warehouse or to conclude a contract for the purpose of the transport of these either with Sendfast sp. z oo, or with another carrier. In this case, the invoice relating to the transport services is sent directly by one or other of these companies to these purchasers, who pay it directly to them.
  • When the order is finalized, the buyers receive two contracts, one concluded with Krakvet for the products purchased and the other concluded, for the purpose of the delivery of these products, either with Sendfast or with another carrier, as well as two invoices, one, established by Krakvet for the purchase of the products, the other, established for the transport services by the company supporting this delivery, each invoice being accompanied by a proof of payment.
  • In addition, the products can be paid by bank transfer, on the Krakvet website, or in cash, upon receipt.


Article 33 of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that, in the case of goods sold by means of a website by a supplier established in one Member State to buyers located in another Member State, when, for the purpose of the delivery of these goods, these buyers, in accordance with the shipping options offered by this supplier, choose a company suggested through this site with which they conclude a contract distinct from that binding them to said supplier for the purchase of said goods, the latter must be considered as being transported “by the supplier or on his behalf”, within the meaning of this article 33, when the role of the same supplier is paramount as regards the initiative and the organization of the essential stages of the transport of the same goods, which is for the referring court to verify, taking into account all the relevant circumstances of the main dispute.


Argumentation of the Court

  • In the event that the goods are dispatched or transported either by the supplier, or by the purchaser, or by a third person, the place of the delivery is deemed to be at the place where the good is at the time of the departure of the shipment or of the transport to the purchaser.
  • However, the place of delivery of goods dispatched or transported, by the supplier or on his behalf, from a Member State other than that of arrival of the shipment or transport is deemed to be at the place where the goods are at the time of arrival of the shipment.
  • In order to determine what is to be understood by a shipment or transport effected ‘by the supplier or on his behalf’ it should be recalled that taking into account the economic and commercial reality constitutes a fundamental criterion for the application of the common system of VAT

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