The EU VAT regime has remained largely unchanged in recent years. However, it is at risk of being undermined by VAT fraud and by an increase in levels of e-commerce. In response, in 2016, the European Commission adopted a VAT action plan comprising a range of reforms intended to make the EU VAT system ‘simpler, more fraud-proof and business-friendly’. The first wave of progress has been good, including this year’s four ‘quick fixes’ to help combat missing trader fraud. 2021 promises wholesale reforms for e-commerce compliance, including marketplaces being co-opted in as VAT collectors. Payment provider will start reporting on credit card use in 2025. However, the 2021 measures leave open loopholes that will need further work; and the flagship reform, the 2022 definitive VAT system, is almost certain to miss its 2022 launch.
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The EU VAT regime has remained largely unchanged in recent years. However, it is at risk of being undermined by VAT fraud and by an increase in levels of e-commerce. In response, in 2016, the European Commission adopted a VAT action plan comprising a range of reforms intended to make the EU VAT system ‘simpler, more fraud-proof and business-friendly’. The first wave of progress has been good, including this year’s four ‘quick fixes’ to help combat missing trader fraud. 2021 promises wholesale reforms for e-commerce compliance, including marketplaces being co-opted in as VAT collectors. Payment provider will start reporting on credit card use in 2025. However, the 2021 measures leave open loopholes that will need further work; and the flagship reform, the 2022 definitive VAT system, is almost certain to miss its 2022 launch.
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