Proposition 53K1126

Projet de loi visant à modifier le Code de la taxe sur la valeur ajoutée.

General information ¶

Submitted by

CD&V Leterme Ⅱ

Submission date

Jan. 27, 2011

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

VAT EC Directive Court of Justice of the European Union indirect tax postal service universal service

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP Open Vld LDD MR

Abstained from voting

N-VA VB

Party dissidents ¶

• Peter Luykx (CD&V) abstained from voting.

Contact form ¶

Do you have a question or request regarding this proposition? Select the most appropriate option for your request and I will get back to you shortly.

Discussion ¶

Feb. 24, 2011 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker. It was discussed and approved by the committee at the committee meeting on Wednesday 9 February last month.

Mr Bernard Clerfayt, Secretary of State, added to the Minister of Finance, explains that the bill follows a judgment of the European Court of Justice in the case TNT Post UK Ltd. It provided a clarification of the concept of public postal service, which should also be replaced in the relevant article in our VAT Act.

Collega Veerle Wouters pointed out that the management agreement with bpost charged the latter with a number of public service tasks. The requirements relating to the well-known European universal service are supplemented by tasks such as the early distribution of newspapers, the distribution of journals issued for non-profit purposes in all households of the country at a ⁇ reduced rate, the port-free distribution of mail shipments covered by the system of the port freedom, as well as the distribution of postal shipments sent at a special rate by the association life. The latter was introduced to support the association life.

The explanatory note also refers to individually negotiated agreements that should be excluded from VAT exemption in all circumstances, which are, in other words, subject to VAT. The question arises, therefore, whether the draft law at issue not only means that rates negotiated individually with customers will no longer be exempt from VAT, but whether the draft law also means that the newly listed services – such as the sending of postal mail by the association life – will no longer be exempt from VAT by the government.

The speaker therefore asks whether the Minister has a vision of the turnover that bpost makes on these postal services and the VAT that will be levied on them. In addition, it is also asked whether bpost will account for the advantage, which arises from the fact that it can deduct more input VAT, in the rates to customers. Or will bpost simply raise those rates by 21%? Has there been a consultation with the Minister of Public Companies on the impact of this on the financial intervention of the Belgian State on bpost?

The Secretary of State confirms that, among other things, the distribution of daily newspapers, magazines and the sending of postal shipments, sent by the association life, are now subject to VAT only if the postal shipments are more than two kilograms. However, he states that the questions concerning the rates that bpost charges and the financial interventions should be addressed to Minister Vervotte.

It also confirms that services and accompanying supplies of goods, which have been negotiated individually, are no longer subject to the VAT exemption.

In the article-by-article discussion, colleague Wouters pointed out the fact that the draft law stipulates that the entry into force is foreseen on 1 January 2012, while the King can determine a date of entry into force prior to that date, 1 January 2012. This is contrary to the principle of legality.

For this purpose, an amendment was submitted to confirm the possible early date of entry into force by the legislative authority. It was approved by three votes for and eight abstentions. The draft law was accepted in that capacity and in its entirety and is on your table.

Congratulations on your maidenspeech, Mr. Dedecker. (Applause of Applause)

Mr. Speaker, I had a letter addressed to you asking whether both Minister Vervotte and Minister Van Quickenborne, whom I do not see here, could be present during the discussion of the bill.

I have understood, Mr. Secretary of State, that you will answer all my questions. Congratulations, you can now represent three ministers. During the discussion in the committee, you only referred to a technical adjustment of a bill. We have had this before. We usually see that there is still something more behind than just a small technical adjustment.

It has also been shown very clearly that this bill will have a huge social impact. The VAT exemption for universal postal services. The whole story can only be understood when we get answers from the Minister for Entrepreneurship and Simplification and from the Minister of Public Enterprises, so that we can correctly situate this. I explain myself more closely.

Mr. Secretary of State, you said during the discussion that the BIPT should explain the fulfillment of the concept of universal postal service, or determine what it means. What is revealed? Only the postal shipments now included in the universal postal service will remain exempt from VAT.

The other functions of the public service will be subject to VAT upon the entry into force of the present draft law. Since the BIPT falls within the competence of the Minister of Entrepreneurship, I would have wanted to address my question to him but will then address it directly to you.

The Minister of Public Companies, Ms. Vervotte, indirectly also plays an important role here. Our question is how bpost will convert this bill into those rates.

I will delineate the matter a little more.

First, the BIPT will soon have to define the concept of universal postal service. The fourth management agreement between the State and bpost makes a clear distinction between the tasks of public services. On the one hand, we have the postal shipments that belong to the universal postal service, on the other hand, there are the other postal shipments, such as the early delivery of newspapers, the sending of magazines, electoral printing work, postal shipments that are sent by the association life or the port-free delivery of postal shipments that fall under the system of port-free or better known as UV shipments. On the basis of this distinction in that fourth management agreement, we expect that these last shipments will be subject to VAT and that only the postal shipments belonging to the universal postal service will remain exempt from VAT.

Can the functions of the public service, which we believe will be subject to VAT after the approval, in the future still be understood as universal postal service? Can Belgium provide such flexibility with regard to the interpretation of the concept of universal postal service in order to exempt or not exempt certain postal shipments from VAT?

You, Mr Clerfayt, referred to that competence in a committee and argued that that competence would belong to the BIPT. Do you stay with your position?

Regarding bpost, Mrs. Vervotte, we would also like to know what pricing policy the minister for bpost, according to this bill, will conduct. Or maybe Mr. Clerfayt can give me that answer? Will bpost continue to apply the current prices for the postal shipments that are now exempt from VAT and will soon be subject to VAT and increase them by 21 % VAT? Or will bpost lower its prices for these services, since they will now enjoy more right of deduction from the input VAT, namely the VAT that will be levied on its incoming transactions?

In fact, it is very important that this is very clear. If other postal shipments are subject to VAT, it means an increase in their operating costs for the association. We naturally assume that most associations have absolutely no right to deduction of this VAT. This means a cost increase of 21%.

The question is how that rimes with the task of public service with which the post is taxed. I refer to Article 2.E of the Management Agreement, I quote: “In order to stimulate the social tissue, it is necessary to provide for the distribution, at a special rate, of postal shipments sent by the association life.” In addition there are the municipalities, the provinces, the Communities and the Regions, which are also likely to expect an increase of one-fifth of their costs, namely 21% VAT, in the context of their UV letter exchange.

For the federal government, it will be a vest-pocket-broek-pocket operation. For the six million personal tax declarations, which are sent by the federal government, the VAT charged from one pocket will flow back into the other pocket. Unfortunately, this does not apply to the lower governments. For them, that VAT simply means additional costs. Are these the additional costs that the federal government will impose on those lower governments? The question is whether they have already been informed about this. Has there been consultation between the federal government and the lower governments? Or are they just going to be faced with a fact?

Another observation is the following. Bpost is the only operator of the universal postal service for the Belgian territory and will continue to do so for the next 8 years. Bpost shall not charge VAT on port charges in the context of universal postal services. However, newcomers or bpost competitors will be required to charge VAT at a rate of 21%. This will only result in a price difference in which the new entrance already has additional costs, namely VAT, compared with bpost. For a normal business, that will not matter much because, because they are VAT liable, they will be able to recover a large part of the VAT.

I reiterate that associations, the banking and insurance sector, the Communities and the Regions cannot do this.

Finally, what effect does this bill have on the financial intervention of the State in bpost? The management agreement includes a VAT clause. It states: “From the moment that VAT must be applied to the public service tasks to be reimbursed, it can be transferred to the State. However, from that point on, the amount of the financial intervention will be reduced in order to charge any increase in the right of deduction of bpost’s input VAT on its purchases.”

Does this VAT clause mean that the financial intervention to bpost will be reduced, with the benefit of that input VAT, which becomes deductible as a result of this bill?

Mr. Clerfayt, there were some very specific questions about finance. You answered in the committee that the interpretation of the concept of “universal postal service” must be made by the BIPT. This answer surprised us somewhat. The BIPT is responsible for monitoring compliance with the obligations arising from the universal postal service. Is it not the competence of Finance to supplement the application of that VAT exemption to the universal postal service?

Preferably, the BIPT and the FOD Finance use the same interpretation of the postal shipments that will subsequently fall under the universal postal service, although it is only because bpost must keep separate accounts in its internal accounting for each of its services and products which either fall under the universal service or do not fall under it. It will be the way in which FOD Finance – and not the BIPT – will apply the new scheme that will be decisive for the answer to whether or not a postal shipment will remain exempt from VAT in the future.

The new wording of Article 44, paragraph 3.14e, of the VAT Code exempts only the services covered by the universal postal service. It is immediately apparent that in this wording it must be assumed that the second condition of the judgment in TNT Post United Kingdom is also included in that Article.

As regards that second condition, in the explanatory memo to this bill it was stated that the acts subject to a condition negotiated individually should in all circumstances be excluded from that VAT exemption, whereas in the bill itself there is no reference to that condition. However, it is clear that it is intended to take this condition into account.

A key question is, among other things, whether an administrative mail contract with deferred fees, our UV shipments, is considered a universal service and whether that agreement is negotiated individually, although the rates and discounts granted are identical for everyone in the same position. It is therefore not 100 % clear whether the sending of administrative correspondence falls within that universal postal service.

If we look at article 142 of the law of 21 March 1991, it would be said that there can be no doubt about this. However, Article 141 of that same law again suggests that administrative correspondence falls within the scope of the public postal service and thus not within the scope of the universal postal service. There is therefore a large ambiguity about the concept of condition that has been negotiated individually.

In the memorandum of explanation attached to the draft law, it is stated that the acts under condition that have been negotiated individually, i.e. under all circumstances, should be excluded from that VAT exemption. I refer to the TNT arrest. On the other hand, the new provision does not refer to that condition.

Should it therefore be assumed that, as soon as bpost is negotiated individually, it no longer refers to postal shipments which are included in that universal postal service?

What Does Individual Negotiation Mean?

What happens if, within that universal service, special and lower prices are fixed, not for a specific customer but in general for all customers who meet certain conditions? This is, for example, a minimum amount of mail that must be delivered within a certain timeframe.

Even in this situation, the lower price has not been individually negotiated, although only certain business customers will be able to meet the conditions to enjoy that lower price.

What if a government is obliged to issue a public procurement? Does this have the effect that VAT must then be charged, even if bpost is the only one in the theoretically liberated postal market that offers the standard rate? Should we assume that...

The [...]

This is also our question, Mr. De Croo.

Should it be assumed that the contracting authority has negotiated by definition and will then be obliged to pay that VAT?

What can bpost do? Is it not the possibility for bpost to negotiate individually, under bpost, to give a small discount on that standard rate to VAT payers entitled to deduction? Then we are talking about a negotiated agreement, with the result that VAT must be levied that the VAT liable person can deduct. Are we not talking about VAT abuses?

Will ADN-Mail contracts continue to be exempted from VAT because it is a universal service whose terms have never been negotiated individually? Should Article 141 of the Act of 21 March 1991 not be amended, since the administrative correspondence and the system of deferred fee are treated as public postal services and not as universal postal services, which are then regulated by Article 142 of that Act?

I come to my decision. We point out an important precedent value that the government could give with this bill. Article 44 of the Code of Value Added Tax contains a number of professions which are now exempt from VAT, without having the right to deduction.

In particular, we refer to the exemption for notaries, lawyers and court enforcement officers. In our neighboring countries, the VAT exemption for these professions has been abolished. If notaries, lawyers and court executors will ever be subject to Belgian VAT, then we should not blame those professional practitioners for later copying the behavior of bpost and the government.

If the government would subsequently put that input VAT on its own by increasing the current prices of bpost with VAT, what would prevent those notaries, lawyers and court enforcement officers from doing the same?

I ask the three ministers to answer the question of who will have to pay VAT on which postal shipments.

Who will benefit from the higher deduction of the input VAT? Will that input VAT be charged at lower prices excluding VAT for bpost customers? Does Bpost put that advantage in its own pocket? Or will that benefit later disappear in the Federal Treasury, by a reduction in the state’s financial intervention to bpost?

Mr. Secretary of State, I would like to point out that Ms. Wouters respected the 30-minute speech time provided for a speech in a general discussion, in Article 48 of the Rules of the Chamber.

I will not go into detail on each point.

First, VAT is a European tax. Therefore, we do not decide on whether or not to convert. We must do this. It is not the question of whether we should do it or not. This must now be done following the judgment of the Court of Justice of the EU of 23 April 2009 aimed at clarifying the definition of universal service. There is no question about the opportunity of the vote that will take place now.

Second, I have already answered you in the committee on the definition of universal service. Mr Van Quickenborne gave me an answer. The content of the universal service is set out in article 142, §1 of the law of 21 March 1991 on the reform of certain economic public enterprises.

In particular, I cite: “The collection, sorting, transport and distribution of postal consignments up to 2 kg; the collection, sorting, transport and distribution of postal packages up to 10 kg; the distribution of postal packages received from other Member States up to 20 kg; the services related to registered consignments and consignments of declared value. The universal postal service includes both national and cross-border services.

For these services, bpost must organize at least one loading, a shipping and an order of those postal shipments at least 5 days a week, except on Sundays and the statutory holidays, and must include all houses of the route when ordering them.

The concept of postal shipment itself is clarified in Article 131, seventh, of this Act. It refers to addressed consignments in definitive form which are delivered by a postal service provider.

You ask me what the consequences will be of the adoption of this new definition.

The Government decided in its session of 15 December as follows, and this is confirmed by Ms. Vervotte. The tax administration, in consultation with bpost, will determine which services are currently and/or in the future covered by the universal postal service in relation to the applicable Community VAT legislation.

The Council of Ministers agrees with the proposal of bpost to adjust the price for the periodicals of the association sector, in order to neutralize the budgetary impact on the associations and to take the financial impact thereof for its own account if VAT is charged on those periodicals. This is good news for those involved.

My colleague Minister of Public Enterprises will ask bpost to report monthly to the Ministers of Finance and Public Enterprises on the progress of the preparations, which are necessary under the provisions contained in the preliminary draft.

The impact on bpost will be taken into account by the Minister of Public Officials and Public Companies.

The other questions concerning the consequences that may have for the contract with bpost will be discussed when the said contract again ends up on the government table. This will probably happen in the future, but this is not the case now.

Mr. Speaker, Mr. Secretary of State, you refer to Article 142. That is also true. I have seen and read the mentioned list. It is true that, if we read the above-mentioned solution, there could be no doubt.

Nevertheless, I ask Mr Van Quickenborne that he also wish to read Article 141 of the aforementioned law. The aforementioned article results in a different division. The article suggests that the sending of administrative correspondence falls under the public postal service and therefore not under the universal postal service. Therefore, there is still a contradiction with the law in the provision. In fact, Article 141 makes it clear that administrative correspondence falls under the public postal service and therefore not under the universal postal service.

Both articles contradict each other. We should therefore amend the law so that the administrative post could also fall under the universal postal service.

I am very pleased that we are already ahead and that you have been able to provide me with better answers to my questions compared to the treatment in the committee. However, the very correct scope of the draft law is not clear. I am very pleased that we would also have a solution for the associations. However, there are still quite a number of other shipments, such as the UV mail shipments. If they were to fall under the provisions of the law, I would like to make it very clear that for the regions, communities and municipalities it will mean an additional cost of 21%, which they will not be able to recover.

So I am glad that I have already received a better answer to my questions. However, we still cannot fully agree.

I also note that Minister Vervotte – we do not know with certainty – will ensure this in the next management agreement. I refer to a question asked by my colleague Bert Maertens. Minister Vervotte then declared that the fourth management agreement will be extended, until the moment the new management contract enters into force. If necessary, it would take appropriate transitional measures, pending the entry into force of the fifth management contract.

I would like to point out that the present VAT bill will come into force on 1 January 2012. The application may be delayed, but I think that is not in it. If so, I hope that Minister Vervotte will be able to make the necessary adjustments to the Fourth Management Agreement or to take the transitional measures to the extent possible.

Your questions show that the text is quite technical. Therefore, it is requested that the experts on VAT at Finance and the post that would settle in the future. A monthly report will be submitted to the Government. You will ⁇ have the opportunity to ask further questions about this.

I am very happy to hear that. I think it is even a unicum that all those different government companies and the FOD Finance will work together fine. I congratulate them for that. I look forward to all these reports.