Public Consultation on the Definitive VAT system for Business to Business (B2B) intra-EU transactions on goods

Policy fields

Taxation

Target groups

The open public consultation will seek the views of businesses, the public and representative organisations

Period of consultation

From 20.12.2016 to 20.03.2017

Context of the consultation

On 7 April 2016 the Commission adopted an Action Plan on VAT - Towards a single EU VAT area. The Action Plan provides clear orientations towards a robust single European VAT area in relation to the definitive VAT system for cross-border supplies. In view of such reform other aspects of VAT will have to be examined, such as the existing special rules for small enterprises (SMEs) and the VAT rates which can be applied by Member States. Hence the Action Plan also sets out actions to adapt the VAT system to the needs of SMEs and proposes options for a modernised policy on EU rules governing VAT rates.
Some of the initiatives stemming from the Action Plan have already been presented by the Commission, while others are being prepared (for a timeline of all the proposals contained in the Action Plan, see p.14 of that document). As part of the ongoing work, public consultation procedures have been or will be launched in respect of the following legislative proposals:

Towards a robust single European VAT area
Public consultation on the Definitive VAT system for Business to Business (B2B) intra-EU transactions on goods.
Adapting the VAT system to the needs of SMEs
Public consultation on the special scheme for small enterprises under the VAT Directive
Towards a modernised VAT rates policy
Public consultation on the reform of VAT rates.

Objective of the consultation

Under the current transitional VAT system, goods sold cross border between businesses established in different Member States are exempt from VAT in the Member State of departure of the goods (this constitutes an exempt intra-EU supply) and the customer has to self-assess and pay the VAT due in the Member State of arrival on his intra-EU acquisition. Such solution leads to complex and fragmented VAT rules. This results into high compliance costs for businesses trading across the EU and significant administrative burden for companies and tax administrations. It also generates important risks of cross-border fraud in the trade of goods and hampers the functioning of the Single Market.
Therefore, the Commission is preparing a legislative proposal for a simpler and fraud-proof definitive VAT system as indicated in its 2016 Action Plan on VAT (COM(2016) 148 final).
This consultation aims at obtaining the views of stakeholders on:

(i) The current VAT situation of B2B intra-EU supplies of goods,
(ii) Possible short term improvements of the current transitional VAT system,
(iii) The need to move towards the definitive VAT system based on the principle of taxation of the supply in the Member State of destination.

Its results will feed into the preparatory work on the definitive VAT system legislative initiative.

How to submit your contribution
Respondents are offered an online questionnaire via the EU Survey Application which is available at the link below. Responses have to be submitted only through that application.
View the questionnaire
Questionnaire
Contact details
responsible service	Directorate-General for Taxation and Customs Union VAT - Unit TAXUD/C1
e-mail	TAXUD-C1-SECTOR-Bec [dot] europa [dot] eu (TAXUD-C1-SECTOR-B[at]ec[dot]europa[dot]eu)
postal address	European Commission Directorate-General for Taxation and Customs Union VAT - Unit TAXUD/C1 Rue Joseph II 79, Office J79 05/065 B-1049 Brussels Belgium
View the contributions
In the interests of transparency, organisations have been invited to provide the public with relevant information about themselves by registering in the Interest Representative Register and subscribing to its Code of Conduct. If the organisation is not registered, the submission is published separately from the registered organisations.
Results of consultation and next steps
Protection of personal data