On 24 February, the College of Commissioners held an orientation debate on the way forward for VAT in the EU. The Commission plans to put forward an Action Plan on this issue in March. The VAT system needs reform: the ‘VAT gap’, which is the difference between the expected VAT revenue and VAT actually collected in member states, was almost €170bn in 2013. Cross border fraud is estimated to be responsible for a VAT revenue loss of about €50bn annually in the EU. At the same time, the current VAT system remains fragmented and creates significant administrative burdens, especially for SMEs and online companies. Finally, the system needs to be modernised to reflect innovative business models and technological progress in today’s digital environment.
On 24 February, the College of Commissioners held an orientation debate on the way forward for VAT in the EU. The Commission plans to put forward an Action Plan on this issue in March. The VAT system needs reform: the ‘VAT gap’, which is the difference between the expected VAT revenue and VAT actually collected in member states, was almost €170bn in 2013. Cross border fraud is estimated to be responsible for a VAT revenue loss of about €50bn annually in the EU. At the same time, the current VAT system remains fragmented and creates significant administrative burdens, especially for SMEs and online companies. Finally, the system needs to be modernised to reflect innovative business models and technological progress in today’s digital environment.
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