VAT in the digital age

Background

On 8 December 2022, the Commission published a package of measures aimed at modernising the 30-year-old EU Value-Added Tax (VAT), with the double purpose of updating the system to the digital era and making it more fraud-resilient, thereby reducing the VAT gap. The EESC, in a new opinion, welcomes the initiative as it considers it a long-awaited and important step towards modernising the VAT system. However, the Committee expresses concerns about some key aspects that need to be addressed when reforming the VAT rules. 

Key Points

In the opinion, the EESC:

• considers that the new VAT system should promote the Single Market, make tax collection effective and timely, while at the same time reducing administrative and compliance costs as much as possible. The Committee encourages the Commission to continue working towards including VAT deductions in the One Stop Shop (OSS) as soon as possible and towards timely VAT refunds;
• points out that the current system treats goods and services in intra-Community trade differently. The EESC regrets that the comprehensive proposal from the Commission does not take the opportunity to align VAT treatment between goods and services. This would have decreased the administrative burden on businesses, especially on SMEs;
• is concerned that the considerable implementation costs for the measures in the comprehensive VAT package could lead to higher prices for consumers;
• expresses the view that the very short time limit for reporting needs to be reviewed and summary invoices should be retained.

The full text of the opinion can be found here. 

Additional information

EESC section: Economic and Monetary Union and Economic and Social Cohesion (ECO)
Opinion type: Mandatory
Rapporteur: Philip VON BROCKDORFF (Workers-Group II / Malta), Krister ANDERSSON (Employers-Group I / Sweden)
Reference: ECO/606-EESC-2022
Referral: COM(2022) 701 final 2022/0407 CNSCOM(2022) 703 final 2022/0409 CNS
Date of adoption by section: 18/04/2023
Result of the vote: 67 in favour, 0 against, 0 abstentions
Date of adoption in plenary: 27/04/2023
Result of the vote: adopted

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