The main political hurdle to the VAT one stop shop was cleared, but the proposed regime won't be in force any time soon.

According to the EU Council press release, the Council reached political agreement on two draft directives and a draft regulation aimed at changing the rules on VAT so as to ensure that VAT on services accrues to the country where consumption occurs, and to prevent distortions of competition between Member States operating different VAT rates.

The “VAT package” contains:

• a draft directive on the place of supply of services;
• a draft directive on procedures for VAT refunds to non-established businesses;
• a draft regulation on improved administrative cooperation as regards VAT and the exchange of information between Member States.

The Council's political agreement was made possible by a compromise regarding the change of rule on the place of taxation for business-to-consumer supplies of telecoms, broadcasting and electronic services.

For this sector:

• application of the new rules and the one-stop scheme will be deferred to 1 January 2015;
• the Member State of establishment will, until 1 January 2019, retain a proportion of VAT receipts collected through the one-stop scheme. This proportion will amount to 30% from 1 January 2015 until 31 December 2016, 15% from 1 January 2017 until 31 December 2018 and 0% from 1 January 2019 onwards;
• the Commission will be asked to report on the feasibility of the new rules before its entry into force.

Apparently, even with all these caveats, there are still some details to be finalised.