On 21 January 2022, the Commission launched a public consultation ahead of a new legislative package later this year to adapt the way value-added tax (VAT) is reported and collected in our increasingly digital world. The consultation seeks feedback from businesses, academics, Member States and other interested parties.
VAT remains a major source of revenue for Member States’ budgets as economic recovery efforts continue following the coronavirus pandemic. However, the VAT system as it stands is ill-equipped to deal with the new digital reality, is excessively complex for businesses and is prone to fraud. At the same time, the rise of the digital economy and the development of new business models create new challenges but also new opportunities.
In its 2020 Action Plan for fair and simple taxation supporting the recovery, the Commission announced that it would therefore come forward with a package of measures to improve the situation. The proposal to come later this year will cover digital reporting requirements for businesses across the EU, new rules for the platform economy, and a single registration for companies in the EU. These measures will reduce the administrative burdens for businesses and reduce costs and also help fight VAT fraud.
The time needed for Member States and businesses to implement any IT system deriving in particular from new reporting obligations will need to be properly assessed and balanced with the removal of others. The call for feedback is open until 15 April 2022 and contributions can be submitted here. A call for evidence with further detail on this initiative is also available here.
- 21 Januar 2022
- Generaldirektoratet for Beskatning og Toldunion