April 15th, 2012 • Last week it was reported in the media that Oxfam’s solidarity shops in the Netherlands and elsewhere which have a turnover of less than €68,000 per year will lose their current exemption from Value Added Tax. Oxfam and a range of organisations run shops in the Netherlands, Belgium and other European countries where goods are sold to raise money to finance their global development work and to the benefit of the people who make the goods, usually individuals or cooperatives from deprived regions in poor countries. Imposing VAT on the smallest of them could kill these outlets. The exemption must be removed as a result of an EU Directive of 2007. In a last attempt to change this decision, I intend to ask the European Commission to bring a new proposal forward. Until then the Commission should simply leave a country such as the Netherlands in peace, and the government should be prepared to defer the measure. I can’t promise anything, but you must in any case try.
The European Commission has always had an extremely broad definition of what ‘distortion of competition’ includes, one which sees small solidarity shops, such as Oxfam’s Dutch and Belgian ‘Wereldwinkels’ (literally, ‘World Shops’) as competition, though for whom is unclear. These shops aim at selling products from developing countries which are unavailable, or whose availability is limited, on the commercial market. Attention has already been paid to this question in the Dutch national Parliament. Small businesses could in the past take advantage of the ‘small business regulation’ and there is, apart from the EU rules, absolutely no reason why this regulation should not continue to operate, certainly as it applies to shops with an idealistic goal.
That’s why I’m going to look into whether the Commission would be prepared to present a proposal which would continue the exemption of small enterprises with such a goal from the working of the directive. If the Commission is serious about its statements regarding the interests of small businesses, then they must change direction when it comes to the imposition of VAT. Should the answer be positive, my next request will be to defer the application of the present directive. That would mean that if the Secretary of State for Finance, Frans Weekers would also defer the imposition of VAT he would not find himself in conflict with Brussels. Success is far from assured, but I wouldn’t like to see the results of Brussels bureaucracy damaging these small solidarity shops.