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Monday, April 7, 2008

EU infrastructure

In this issue:

  1. EU agrees on new VAT based on the country where consumers are rather than that of the producer
  2. MEP's decision to improve internal trade- check out how.
  3. UN launches a transport campaign to promote communal transport.
  4. French farmers vs. WTO or how agriculture fights back GMO.

EU ministers approve sensitive VAT reform

13 February 2008

After more than four years of deadlock, European finance ministers have adopted new rules on the way value-added tax is collected on services provided between member states. Revenues will now be reaped by the country in which the consumer is located rather than the one in which the company providing the service is established.

The aim of the reform is to minimise the administrative burden for companies engaged in cross-border operations and prevent distortions of competition between countries operating different VAT rates.

It does this by shifting the place – and thus also the rate – of taxation from the service provider's country of establishment to that of the consumer. In this way, all customers are charged the same VAT rate regardless of their supplier's location.

The reform had been long delayed due to Luxembourg's vetoing of the plans, which it claimed could cause it to lose out on VAT revenues worth around €200 million per year. The main concern related to earnings generated by large electronic service companies, such as, Skype or PayPal, which have all settled in Luxembourg, attracted by its business-friendly VAT rate of 15% - the lowest allowed within the EU.

However, under a compromise agreed last December (EurActiv 4/12/07), the small country obtained a delay in the introduction of the new VAT system for electronic, telecoms and broadcasting services, which will be phased in from 2015 rather than implemented directly as of 2010.

Under the deal, countries that are home to telecom and electronic service businesses will be allowed to keep their hands on 30% of the VAT revenues collected after 2015, with only 70% going to the country of consumption. This share would be cut progressively to 15% after 2017 and zero as of 2019, in order to ensure a "smooth transition".

The reform package also introduces the possibility for businesses to fulfill all their EU-wide VAT obligations in the country of their establishment, thanks to the creation of "one-stop shops". A new, fully-electronic procedure for the reimbursement of VAT incurred by companies in member states where they are not established will also be set up, in order to ensure a faster refund for claimants. Member states will be required to pay interest if they are late making the refunds.

Small and medium-sized enterprises, represented by UEAPME, added that the one-stop-shop system would "dramatically diminish bureaucracy" and put an end to "years of uncertainties in which SMEs were potentially confronted with 27 different administrative systems and collection formulas, triggering unbearable compliance costs and acting as a barrier to cross-border trade in the EU". source

My comment: Ok, I still don't get the one-stop-shop. Isn't it the same as taxation in the country where the company is established? If not-great thinking, really. Or maybe it means just filling the form and paying. Yeah, more likely. Well, still, this is a good one.

MEPs adopt measures to strengthen internal goods market

22 February 2008

Parliament has adopted a package of measures to enhance free trade within the bloc after it emerged that many member states are blocking imports of specific products from other EU countries on the basis that they do not meet particular national technical standards.

The major objective of the proposed package, originally tabled by the Commission in February 2007, is to make it easier for companies and especially SMEs to sell their products throughout the Union, while at the same time improving consumer protection.

It primarily aims to do so by facilitating the application of the principle of "mutual recognition", whereby the quality and safety standards of goods produced in one EU member state are sufficient to allow their sale throughout the EU.

Varying technical regulations among member states mean that the principle of mutual recognition is often denied.

The adopted package aims to enhance confidence in technical regulations while allowing for a high level of product quality and safety through the following principal measures:

  • Introducing better market surveillance rules to ensure that unsafe products are removed from the EU market;
  • Establishing an accreditation system for European conformity assessment bodies to enhance the credibility of CE marking;
  • Establishing a common legal framework for industrial products by setting out common definitions and procedures to allow future legislation to be more consistent and easier to implement, and;
  • Making member states bear the cost of demonstrating that a product is unsafe if they wish to remove it from their market and obliging them to give detailed objective reasons to the manufacturer, allowing them to react, before the final refusal.

The Council is expected to adopt the package soon to allow the new measures to enter into force in 2009.

The package, which the Commission estimates could give a €150 billion boost to intra-EU trade, has received a warm welcome from businesses. "Although the free movement of goods is one of the most complete freedoms in the EU, we sometimes forget that companies are still facing numerous barriers when trading across borders within the internal market," said Xavier Durieu, secretary general of the retailers, wholesalers and traders group EuroCommerce.

My comment: That's how I like it. Although I have my doubts this is feasible, as the requirements and the standards in different member-states vary a lot as well as their enforcement but it is a beginning. Let's see what will happen.

UN launches public transport campaign

22 February 2008

Public transport operators are teaming up with the United Nations in a campaign to encourage people to leave their cars at home and take the bus, metro, train or tram instead.

The International Association of Public Transport (UITPexternal ) and the United Nations Environment Programme (UNEPexternal ), on 21 February, launched a large-scale joint advertising campaign to encourage more individuals to take public transport.

With road transport accounting for 21% of European carbon dioxide emissions, the two organisations underlined the important role that motorists can play in reducing our negative impact on the environment and combating climate change.

"We want to make them aware that their transport choices can make a difference in the fight against climate change. We want to empower them to make the right decision," said UITP Secretary General Hans Rat at UNEP's Global Ministerial Environment Forum.

50% of all urban trips are under five kilometres and could easily be replaced by walking, cycling or public transport, the association claims. Promoting less car-dependent lifestyles is also a key aim of the European Commission's Green Paper on Urban Mobility (EurActiv 26/09/07).

Detailed actions, including measures to make alternatives to car use (walking, cycling, public transport, scooters and motorbikes) safer and more attractive and to encourage car-pooling solutions or increased 'virtual mobility' – such as tele-working and tele-shopping – are due to be presented this October.

The proposals could also include measures to encourage towns and cities to implement urban charging schemes, such as those in place in London and Stockholm, where drivers are required to pay daily fees in order to discourage them from congesting and polluting the city centres. source

France rallies EU partners against world trade pact

19 February 2008

Hopes of concluding a global trade deal by the end of the year have been dealt a blow after France announced that 20 of the EU's 27 farm ministers had rejected the latest WTO proposals on cutting tariffs and subsidies in the farming sector.

Representatives from countries with a more pro-free trade stance, such as the UK, Sweden and Denmark, did not attend the meeting.

The Council's session came ten days after World Trade Organisation mediators sought to advance the seven-year, troubled negotiation process by issuing revised drafts for agriculture, industry and services (EurActiv 19/07/07).

While the EU's Trade Commissioner Peter Mandelson, who negotiates on behalf of the 27 member states in the WTO, has said the farming paper forms "a good basis for further negotiations." Barnier rejected it as being "totally unbalanced between concessions that would be made and other issues like services, industry or geographical indications, where we see no progress".

France's rejection of the draft comes as no real surprise after years of intense lobbying against any large tariff and subsidy cuts, which it fears could destroy its farming sector (EurActiv 30/05/07). However, the fact that it has now claimed the backing of so many other EU members could signal bad news for the talks.

Mandelson, however, told Reuters he was unaware that more countries had joined France and other pro-farm states, such as Ireland and Poland, in criticising his more liberal position in the negotiations.

Member states do not only have to consider the farming aspects of the WTO negotiations, but the pact as a whole. This means that any advances in provisions governing world trade in goods and services could ultimately outweigh any concessions on agriculture, as these two sectors account for a significantly larger proportion of member states' commercial activities.

The Commission has acknowledged that improvements will be needed in the industry and services papers in order to achieve the "necessary balance" between non-agricultural and agricultural market access.

My comment: Haha, cool! I must say I'm totally behind France and the rest. Not because I'm such a fan of French farmers, no. I simply dislike WTO. A lot. That's why "Go, France!"
And I believe an agreement on this with WTO may work in their benefit on the GMO issue, meaning it can give them (USA) more power in EU's decisions, that's why better out than sorry.

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