Bill on Amendments to Value Added Tax Act passed second reading in Riigikogu
The Bill on Amendments to the Value Added Tax Act which the President had rejected passed the second reading in the Riigikogu. The aim of the Bill is to reduce opportunities for underreporting turnover.
The second legislative proceeding of the Act on Amendments to the Value Added Tax Act (493 UA), initiated by the Government, was at the second reading. The aim of the Act is to reduce opportunities for underreporting turnover, improve the conditions of competition, and increase tax receipts through reduction of damage caused by violation of the Value Added Tax Act. The Finance Committee submitted six motions to amend the Bill, arising from the positions of the Government and interest groups. The regulation has been specified, taking into account the observations made in the decision of the President.
Deputy Chairman of the Finance Committee of the Riigikogu Remo Holsmer said before the Riigikogu that the Committee had found that both the Bill and the explanatory memorandum had to be amended in order to eliminate the deficiencies pointed out by the President. “The Committee found that it would be most expedient if the initiator of the Bill prepared a new explanatory memorandum. For the preparation of the explanatory memorandum, working groups were formed in the Ministry of Finance in order to describe in more detail the impacts of the new regulation, the accompanying administrative burden, the security of handling data, and the issues relating to the proportionality of the proposed restrictions, and to analyse the conformity of the regulation with European Union law. The Finance Committee admitted that, in the event of a renewed deliberation of the Act, the issues relating to liberal professions will have to be provided for unambiguously, and implementing provisions which would allow for a smoother transition to the new regulation will have to be provided for,” Holsmer said.
The Bill provides for a transition period. So the Bill gives the possibility of presenting the totals of invoices as added up, broken down by transaction partner, in the annex to the value added tax return until 20 January 2016. The amendment of the Accounting Act has been abandoned.
As other major amendments in the Act, it can be pointed out that data to which the obligation of professional secrecy extends without reservation on the basis of an Act will not be reflected in the annex to the value added tax return.
The annex to the value added tax return will reflect the data of the invoices issued to and received from legal persons, sole proprietors or state, rural municipality or city authorities, and the registry code issued to the transaction partner in Estonia, and the personal identification code in the case of a notary or bailiff. The invoices issued to natural persons who are not sole proprietors will not be reflected in the annex. Thus, in retail, non-personal sales will not be reflected in the annex to the value added tax return. For example, if the purchaser has not turned to the vendor with a request to issue the invoice in the name of the business, it is regarded as non-personal sale, and the data of such invoice will not be reflected in the annex to the value added tax return.
The annex to the value added tax return will reflect invoices in which the transferor of goods or the service provider has specified the turnover taxable at the 20 per cent and 9 per cent VAT rates, with the exception of invoices issued under the special scheme, when the total amount of invoices exclusive of value added tax is at least 1000 euro per transaction partner in the taxable period. The threshold based on the transaction partner will be calculated separately for purchase invoices and sales invoices.
Sven Sester, Helir-Valdor Seeder and Aivar Kokk, Toomas Tõniste, Peeter Laurson, Urmas Reinsalu, Aivar Riisalu, Liisa-Ly Pakosta, Andrus Saare, Andrus Ansip, Remo Holsmer, Rannar Vassiljev, Andres Herkel and Marko Pomerants took the floor during the debate.
The Pro Patria and Res Publica Union Faction moved to suspend the second reading of the Bill. The motion was not supported. 20 members of the Riigikogu voted in favour and 44 voted against.
The final vote on the Bill is scheduled for May 7.
The Riigikogu passed with 80 votes in favour the Act on Amendments to the Product Conformity Act and Amendments to Other Associated Acts (403 SE), initiated by the Government. The Act brings the current regulation into conformity with the Constitution and increases legal clarity as to how a standard may be referenced in legislation. The Act does not directly affect the provisions concerning the obligation to refer to standards, present in the current law. The prohibition on the establishment of an obligation to refer to standards does not arise from this Act but directly from the Constitution. In terms of referencing of standards, this Act is only meant to explain and provide guidance for further legislative drafting.
The Riigikogu passed with 75 votes in favour (one member of the Riigikogu abstained) the Resolution of the Riigikogu “Amendment of the Resolution of the Riigikogu “Formation of the Anti-Corruption Select Committee”” (634 OE), submitted by the Social Democratic Party Faction. With the Resolution, Rein Randver was appointed as a member of the Committee instead of Andres Anvelt, and Jaak Allik was appointed instead of Helmen Kütt. Also, Kalvi Kõva was appointed as an alternate member of the Committee instead of Rein Randver, and Kalev Kotkas was appointed instead of Jaak Allik. The change of members was due to Andres Anvelt assuming the office of the Minister of Justice and Helmen Kütt assuming the office of the Minister of Social Affairs.
The following Bills passed the second reading:
The Bill on Amendments to the Packaging Act and the Packaging Excise Duty Act (561 SE), initiated by the Government. The Bill regulates in more detail and increases the transparency of the activities of packaging recovery organisations functioning on the principle of producer responsibility. This will enhance control over their activities. Current practice has shown that the packaging and packaging waste collection system does not function at the necessary level and does not ensure the meeting of the recovery obligation of the state. Recovery of waste, in particular recycling as material will be made significantly environmentally cleaner. More extensive recovery of packaging waste has a direct positive environmental impact through the use of recycled materials.
The Bill on Amendments to the Code of Civil Procedure and Amendments to Other Associated Acts (545 SE), initiated by the Government. The Bill amends the procedure for determining procedural expenses applied in civil proceedings. The Bill creates possibilities to make the determination of the financial amount of procedural expenses and the ordering of the payment thereof from the opposing party in civil proceedings significantly speedier for parties to proceedings. The procedure for determining procedural expenses is established, where the expenses are determined within the framework of the particular proceedings in which the expenses were incurred. If, so far, in most cases assistant judges adjudicated the matters relating to the determination of procedural expenses, then in the future the judge who conducts proceedings in the main case will determine procedural expenses.
The Bill on Amendments to the Public Information Act and the Electronic Communications Act and Amendments to Other Associated Acts (649 SE), initiated by the Government. The Bill specifies the tasks and supervision competence of the Estonian Information System Authority and the procedure for supervision. As of 1 June 2011, the Estonian Informatics Centre was reorganised into the Estonian Information System Authority. Thereby a governmental authority was established with the statutory task of exercising supervision over compliance with the Public Information Act and legislation established on the basis thereof upon taking into use of a database and administration of a database. The Bill also amends the provisions concerning the organisation and supervision of the electronic communications field at the national level. The tasks distributed between two subunits of the Ministry of Economic Affairs and Communications will be brought into the competence of one regulator. The tasks, rights and obligations of the Competition Authority as the regulator of the communications market will be transferred to the competence of the Technical Surveillance Authority as of 1 July 2014. The amendment proposed by the Bill will ensure optimal organisation of this field. The Technical Surveillance Authority will have a legal basis to charge a state fee for reviewing an application for a television and radio services activity licence.
