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VAT reform package (I)

EESC opinion: VAT reform package (I)


Key points:


  • considers that the current EU VAT system is highly fragmented and complex and subsequently reduces and distorts trade and investment by creating unnecessary and extensive administrative burdens and trade barriers for businesses;
  • welcomes the Commission's determination to close the VAT gap and the involvement of the European Public Prosecutor's Office in cases of VAT fraud above EUR 10 million;
  • recommends that tax authorities investigate how upcoming technologies can contribute to the fight against VAT fraud and be used as a helpful tool for simplifying the administrative burden on both businesses and tax administrations in order to achieve the necessary transparency. In particular, Member States should create appropriate fora for the exchange of best practices in revenue collection and on how to develop technologies to facilitate proper tax collection in cross-border trade situations;
  • calls on all the institutions involved in the process of reforming the VAT system to explore how a common system for both services and goods can be rolled out as quickly as possible, thereby alleviating the foreseeable problems arising from the existence of two systems, one for goods and another for services;
  • underlines the importance of tax neutrality between different companies, pointing out that VAT payments should not be allowed to adversely affect the liquidity of some businesses. In this respect, importers of goods should be required to pay VAT when the products are actually put on the market and not when such products are merely imported and deposited;
  • notes that with regard to the certified taxable person ("CTP") the Commission deems this concept to be important for the transition towards a VAT system based on the destination principle and agrees that businesses whose tax reliability is proven should be able to benefit from appropriate simplification measures;
  • considers it important that the Commission carry out a comprehensive regulatory impact assessment aimed at ascertaining – including in quantitative terms – the practical implications of the action plan on VAT as a whole for individuals, businesses and tax authorities.