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Detailed technical measures for the definitive VAT system [EU Legislation in Progress]

Written by Ana Claudia Alfieri (1st edition),

post-it acronym : VAT

© Jérôme Rommé / Fotolia

The common European value added tax (VAT) system was set up in 1967 and reformed to adapt it to the entry into force of the internal market in 1993. Therefore, the existing rules governing intra‑Community trade, which were intended to be transitory, are 25 years old. VAT is an important source of revenue for both national governments and the EU budget, but the current system is ill-adapted to the challenges of a modern economy. It presents such problems as vulnerability to fraud, high compliance costs for businesses, and a heavy administrative burden for national authorities.

As part of the action plan on VAT, the European Commission adopted a new proposal in May 2018. This proposal would amend the VAT Directive (Directive 2006/112/EC) to introduce the detailed technical measures of the definitive VAT system for the intra-EU business to business (B2B) trade of goods. It is part of the action plan on VAT and follows another proposal that sets out the basic features of the reform of the common EU VAT system. Some aspects of the previous proposal were taken out of the negotiations to be examined with this one.

Versions

Proposal for a Council directive amending Directive 2006/112/EC as regards the introduction of the detailed technical measures for the operation of the definitive VAT system for the taxation of trade between Member States
Committee responsible: Economic and Monetary Affairs (ECON) COM(2018) 329
25.5.2018
Rapporteur: Fulvio Martusciello (EPP, Italy) 2018/0164 (CNS)
Shadow rapporteurs:

 

Roberts Zīle (ECR, Latvia)
Thierry Cornillet (ALDE, France)
Molly Scott Cato (Greens/EFA, United Kingdom)
Barbara Kappel (ENF, Austria)
Consultation procedure (CNS) – Parliament adopts a non-binding opinion
Next steps expected: Publication of draft report

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