The European Commission’s VAT Expert Group has published a set of broad common principles for establishing the ‘definitive VAT system’ for intra-EU supplies of goods by 2019.
The European Commission’s VAT Expert Group has published a set of broad common principles for establishing the ‘definitive VAT system’ for intra-EU supplies of goods by 2019.
An opinion published by the group explains that the EU has lived with a transitional VAT system for cross-border trade (‘the transitional VAT system’) for more than 20 years. During these years cross-border trade has developed and the internal market now sees substantive trade both in goods and services.
The transitional VAT system is a barrier to the greater growth of Europe as it is outdated in a globalised and interconnected economy. The opinion says: it is more difficult to trade within the EU than to export goods to or import goods from non-EU countries; SME’s are particularly hindered; the cost of compliance has become disproportionate; and fraud prevention measures increase complexity and uncertainty.
The opinion also explains that five options are currently being reviewed for developing the definitive VAT system for the supplies of goods.
The group will assess each of the models in the light of the following principles: legal certainty and simplicity; neutrality and proportionality; efficiency, to safeguard VAT revenues, ease collection and reduce the administrative burden for businesses; and effective enforcement and collection by the member states in close cooperation with each other, including dispute resolution mechanisms.
The group urges the Commission, the Council (all member states), and the European Parliament to make this a strategic and urgent priority in order to reach an agreement with an implementation plan on the definitive VAT system as soon as possible and by 2019 at the latest.
The European Commission’s VAT Expert Group has published a set of broad common principles for establishing the ‘definitive VAT system’ for intra-EU supplies of goods by 2019.
The European Commission’s VAT Expert Group has published a set of broad common principles for establishing the ‘definitive VAT system’ for intra-EU supplies of goods by 2019.
An opinion published by the group explains that the EU has lived with a transitional VAT system for cross-border trade (‘the transitional VAT system’) for more than 20 years. During these years cross-border trade has developed and the internal market now sees substantive trade both in goods and services.
The transitional VAT system is a barrier to the greater growth of Europe as it is outdated in a globalised and interconnected economy. The opinion says: it is more difficult to trade within the EU than to export goods to or import goods from non-EU countries; SME’s are particularly hindered; the cost of compliance has become disproportionate; and fraud prevention measures increase complexity and uncertainty.
The opinion also explains that five options are currently being reviewed for developing the definitive VAT system for the supplies of goods.
The group will assess each of the models in the light of the following principles: legal certainty and simplicity; neutrality and proportionality; efficiency, to safeguard VAT revenues, ease collection and reduce the administrative burden for businesses; and effective enforcement and collection by the member states in close cooperation with each other, including dispute resolution mechanisms.
The group urges the Commission, the Council (all member states), and the European Parliament to make this a strategic and urgent priority in order to reach an agreement with an implementation plan on the definitive VAT system as soon as possible and by 2019 at the latest.
