Plan to modernise EU VAT announced
14th April 2016
The EU Commission has this month adopted a plan to modernise and simplify VAT as it applies across the EU member states.
The stated objectives are to better tackle VAT fraud, support digital and e commerce, reduce the administrative burden of VAT for intra EU trade especially for SMEs, reduce differences in the various VAT rules and consider more flexibility on EU VAT rates.
The 1993 Single Market VAT rules were always supposed to be transitional and for years we were told to expect a move away from VAT being collected in the EU state of the customer (Destination principle) towards VAT being charged in the EU state of the supplier (Origin principle) but the new plan confirms that intra EU trade will still be taxed at the VAT rate at the destination member state. However, the plan is that there will be an EU wide web portal to simplify VAT collection for businesses and anti-fraud measures to collect revenue more effectively.
The EU Commission believes that it can cut intra EU VAT fraud by 80% with yet to be announced measures that will be included in the new VAT system. This year measures to better tackle fraud within the current EU VAT system will also be announced and these appear to be based around improved exchange of information between the EU VAT authorities.
It looks like the minimum 15% standard VAT rate will remain in place across the member states but there may be a change to allow more flexibility on what each member state can include in their reduced and zero VAT rates.
By the end of this year the Commission promises to publish a legislative proposal to both modernise and simplify the VAT rules relating to digital business and e commerce, possibly including parity of VAT treatment for digitised and printed publications and in 2017 the Commission states that it will also issue details of a simplified VAT package for SMEs to help them grow and encourage their intra EU trade.
I’m sure we will be commenting further on these proposed changes as details materialise.
To read more on this plan please see: EU press release on Action Plan
Newry businessman Linden guilty of £160k tax fraud - Belfast Telegraph
21 September 2017 20:45
UK budget deficit narrows as shoppers boost VAT receipts - The Guardian
21 September 2017 11:47
U.K. Treasury Tax Adviser VAT Review to Come in a 'Few Weeks ... - Bloomberg BNA
21 September 2017 10:30
UK public borrowing lower than expected in August due to strong VAT revenue - The Independent
21 September 2017 10:03
Freelancers' adviser warns of 'very active' VAT man - Freelance UK
21 September 2017 09:37
Wetherspoons Offers One-Day Discount Of 7.5 Percent In VAT Protest - HuffPost UK
20 September 2017 20:05
Software tools can benefit from VAT exemption, rules UK Tribunal - Out-Law.com
18 September 2017 10:45
Apple responds to criticism of higher UK iPhone prices - Telegraph.co.uk
16 September 2017 07:58
Amazon, EBay Grilled By UK Politicians Over Sellers' VAT Fraud - Bloomberg BNA
14 September 2017 12:02
Amazon and eBay turning blind eye to VAT evasion, say MPs - The Guardian
13 September 2017 19:10