2012 promises to continue the trend of continuous change in VAT. The EC’s Communication published last December, following its Green Paper on VAT, promised progress on making VAT more workable for businesses; making VAT more effective in supporting the Member States' efforts to achieve fiscal consolidation and economic growth; and addressing revenue losses from uncollected VAT and fraud. It is also anticipated that the Council and the Commission will be working towards the finalisation of the mooted changes to the financial services exemption, but progress here has been slow to date. 2012 should be a good year in terms of judicial decisions that shed light on the meaning of VAT legislation. The main issues currently before the ECJ are: compound interest; input tax deduction; management services supplied to special investment funds; single/multiple supplies; tax evasion and penalties; VAT grouping; and vouchers.
