Members' Research Service By / July 3, 2018

Stronger administrative cooperation in the VAT field [EU Legislation in Progress]

Value added tax (VAT) is an important source of revenue for both national governments and the European budget and, from an economic point of view, a very efficient consumption tax. However, the rules governing intra-Community trade are 25 years old and the current common EU VAT system is vulnerable to fraud.

© mrfiza / Fotolia

Written by Cécile Remeur (2nd edition),

Finance Concept with Stack of Coins - VAT Alphabet arrangement.
© mrfiza / Fotolia

Value added tax (VAT) is a very efficient consumption tax and an important source of revenue for both national and European budgets. However, the rules governing common EU VAT system are 25 years old. A substantial review was initiated from 2016 onwards in order to update it and make it less vulnerable to fraud.

The reform of the VAT framework towards a definitive VAT system for intra-Community business-to-business (B2B) transactions was planned in several consecutive steps. The Commission proposal to amend Regulation 904/2010 (Regulation on VAT administrative cooperation) was initially put forward on October 2017, as part of the ‘definitive VAT system package’ and was itself amended on 30 November 2017. The resulting Regulation 2018/1541 was adopted on 2 October 2018, and applies in full as of 1 January 2020. It introduces the concept of the ‘certified taxable person’ and measures aimed at enhancing cooperation between Member States, improving cooperation between tax authorities and law enforcement bodies and addressing cross-border refund issues.


Proposal for a Council Regulation amending Regulation (EU) No 904/2010 as regards the certified taxable person; Amended proposal for a Council Regulation amending Regulation (EU) No 904/2010 as regards measures to strengthen administrative cooperation in the field of value added tax
Committee responsible: Economic and Monetary Affairs (ECON) COM(2017) 567 of 4.10.2017

COM(2017) 706 of 30.11.2017 (amended proposal)


Consultation procedure (CNS) – Parliament adopts a non-binding opinion only

Rapporteur: Roberts Zīle (ECR, Latvia)
Shadow rapporteurs: Gabriel Mato (EPP, Spain)
Olle Ludvigsson (S&D, Sweden)
Thierry Cornillet (ALDE, France)
Barbara Kappel (ENF, Austria)
Miguel Urbán Crespo (GUE/NGL, Spain)
Molly Scott Cato (Greens/EFA, United Kingdom)
Next steps expected: Regulation 2018/1541
OJ L 259 16.10.2018, pp. 1-11

timeline 7 steps finished - adoption by council

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