Brussels, 30/04/2015. The European Commission’s planned Digital Single Market strategy seems to be proving somewhat difficult to fine-tune. The strategy is set for release on 6th May 2015, however its content is so wide-ranging, from copyright piracy via VAT to UK-style default “porn filters”, that an implementation date seems somewhat problematic.
Not least in the area of VAT or value-added tax, which has seen the new 2015 implementation subject to vocal protest from small businesses across Europe. Before the change, businesses charged VAT in their own country (“country of seller”); since January 2015 it is being charged in the purchaser’s location (“country of buyer”).
In the UK however, the new regulation has removed what was a relatively high VAT-registration threshold, one that helped minimise red tape for the “kitchen-table entrepreneurs” and enabled them to operate relatively successfully in the digital single market on low profit margins.
The 2015 VAT regulation forced these micro-businesses, often individuals or sole traders, to register for VAT for the first time, something that most of them had managed to avoid by having a low turnover. This additional red tape has eaten into already micro-sized profit margins, to the point where many of these small-scale entrepreneurs have said they are ceasing to carry out any cross-border trading in Europe. Not exactly a plus for the Commission’s Digital Single Market.
After some fairly active lobbying on this issue at national government level (in the UK for example) and in the European Parliament, the Commission has come up with a possible solution – introduce an EU-wide VAT lower threshold for small businesses selling goods and services across Europe. The detail is yet to emerge.
But VAT is just one example. The strategy also includes copyright issues, combating piracy, ePrivacy, the introduction of “default on” ISP internet filters, big data, geoblocking, radio-spectrum usage and cloud storage. It seems that almost every aspect is likely to upset someone and bring protest.
A case of a strategy that has become too big for its boots?
© Philip Hunt, 2015.