Written by Cécile Remeur (2nd edition),
Value added tax (VAT) is a consumption tax borne by the final consumer. It is an important source of revenue for national governments and the European Union (EU) budget. However, the existing rules governing intra-Community trade are 25 years old and the current common EU VAT system is still ‘transitional’. This framework presents problems such as vulnerability to fraud, compliance costs for businesses and also a heavy administrative burden for national authorities. It is under review along the lines of the April 2016 VAT Action Plan.
The reform of the VAT framework towards a definitive VAT system for intra-Community business-to-business (B2B) transactions is planned in several consecutive steps. The first step focuses on B2B transactions in goods, while the second one in services. Directive 2018/1910, adopted on 4 December 2018, was put forward by the Commission in October 2017 as part of the ‘definitive VAT system package’. The directive amends the VAT Directive (Directive 2006/112/EC) so as to introduce the basic features of the definite VAT system for business-to-business (B2B) goods transactions.
|Proposal for a Council Directive amending Directive 2006/112/EC as regards harmonising and simplifying certain rules in the value added tax system and introducing the definitive system for the taxation of trade between Member States|
|Committee responsible:||Economic and Monetary Affairs (ECON)||COM(2017) 569
|Rapporteur:||Jeppe KOFOD (S&D, Denmark)||2017/0251(CNS)|
|Shadow rapporteurs:||Ivana Maletić (EPP, Croatia)
Sander Loones (ECR, Belgium)
Thierry Cornillet (ALDE, France )
Dimitrios Papadimoulis (GUE/NGL, Greece)
Molly Scott Cato (Greens/EFA, United Kingdom)
Barbara Kappel (ENF, Austria)
|Consultation procedure – parliament adopts only a non-binding opinion|
|Next steps expected:||Council Directive (EU) 2018/1910
OJ L311, 7.12.2018, pp. 3-7