The previous Financial Secretary wrote to you on 10 May 2007[21] to provide you with an update on progress on this particular legislative package, which was due to return to ECOFIN in June.

  As expected, the German Presidency did push for agreement to the proposed Directive to reform the existing cross-border refund procedure as part of an overall VAT discussion at the June ECOFIN. The other VAT proposals that featured were the proposed changes to the rules on the place of supply of services (EM 5051/04 and 11439/05). Although the Committee cleared those proposals last year, they have yet to be agreed in ECOFIN. Finally, the discussion also covered the possible implementation date for these changes (the Presidency suggestion was 1 January 2010) and the need for some form of appropriate simplification mechanism before the completion of work on the proposed electronic One Stop Scheme.

  As highlighted last time, for non-EU businesses Directive 2002/38/EC was extended in November last year (EM 15428/06) and that extension is due to expire on 31 December 2008. The Presidency suggestion was that those arrangements should be extended again, and that they should be made available to EU as well as non-EU businesses, until the electronic One Stop Scheme is available (currently assumed to be from 1 January 2013).

  All this was essentially agreed at ECOFIN in June, subject to some technical work, which is being taken forward by the Portuguese Presidency. One work strand involves the proposed changes to the place of supply of services for B2C supplies for telecom, broadcasting, electronic and maritime services. The other is about control and administrative cooperation arrangements. These issues are due to return to ECOFIN before the end of the year. Assuming Member States are able to agree, the proposed changes would then be formally adopted by Council.

  The other two elements, the proposed Directive to introduce a range of simplification measures (including the proposal to give Member States more flexibility in setting National Thresholds) and the proposed Regulation, remain outstanding. There has been no further discussion on these elements so far under the Portuguese Presidency.

  I hope you find this information helpful.

7 November 2007

  I wrote to you on 7 November 2007 to provide you with an update on progress on this particular legislative package.

  As expected, the proposed Directive to reform the existing cross-border refund procedure was agreed at ECOFIN at the end of last year and was adopted at ECOFIN on 12 February 2008, together with the other VAT proposals on place of supply of services (EM 5051/04 and 11439/05).

  The two other elements of this particular legislative package, the proposed Directive to introduce a range of simplification measures (including the proposal to give Member States more flexibility in setting National Thresholds) and the proposed Regulation to support those measures, remain outstanding.

  There was no discussion on those elements under the Portuguese Presidency and I will update you if there is any progress under the Slovenian Presidency.

  I hope you find this information helpful.

28 February 2008