On 6 December 2011, the European Commission adopted a Communication on the future of VAT. This sets out the fundamental characteristics that must underlie the new VAT regime. It lists the priority actions for the coming years needed to create a simpler, more efficient and more robust.
- Communication on the future of VAT
- Follow-up to the Communication
- Preparatory steps to the Communication
On 6 December 2011, the European Commission adopted a Communication on the future of VAT. This sets out the fundamental characteristics that must underlie the new VAT regime. It lists the priority actions for the coming years needed to create a simpler, more efficient and more robust VAT system in the EU tailored to the single market.
For more information, please see the full text of the Communication (COM (2011) 851 ), the press release (IP/11/1508 ), the frequently asked questions (MEMO/11/874 ) and Commissioner Šemeta's speaking points .
Digital Single Market – Modernising VAT for cross border e-Commerce
On 6th May 2015, the European Commission announced its Strategy for the EU Digital Single Market. In this context the Commission should make legislative proposals to modernise the VAT for cross-border e-commerce and reduce the administrative burden of businesses arising from different VAT regimes. This includes:
- extending the single electronic registration and payment mechanism to intra-EU and third country online sales of tangible goods to private consumers;
- introducing a common EU-wide simplification measure (VAT threshold) to help small start-up e-commerce businesses;
- allowing for home country controls including a single audit of cross border businesses for VAT purposes and;
- removing the VAT exemption for the importation of small consignments from suppliers in third countries.
Quick reaction mechanism (action No 13)
The Council approved the Quick reaction mechanism (action No 13) on 22 July 2013. See the Council press release.
In its conclusions adopted on 15 May 2012, the Council welcomed the Commission's Communication on the future of VAT and supported the objective of an EU VAT system which should be simpler, more efficient and neutral, robust and fraud-proof.
The full text of the Council conclusions is available from the Council website.
Practical guidelines on new VAT rules for 2015 (action No 1)
The Commission has published the practical guidelines in English on 29 October 2013. They are now available in all EU official languages as well as Chinese, Japanese and Russian.
Standard VAT Return (action No 6)
A proposal was put forward on 23 October 2013 for easing life for businesses and improving tax compliance.
VAT Expert Group
On 26 June 2012 the Commission adopted Decision 2012/C 188/02 setting up a group of experts on value added tax, the VAT Expert Group.
The Commission may consult the group on any matter relating to the preparation and implementation of EU legislation and other policy initiatives taken at EU level in the field of VAT.
VAT Committee guidelines (action No 4)
The Commission has published all the guidelines agreed by the VAT Committee since its set up in 1977.
EU VAT forum (action No 5)
On 3 July 2012, the European Commission decided (see page 4) to set up the EU VAT Forum where business and tax authorities strive to improve the way VAT works in practice.
Taxation at destination (action No 25)
On 30 October 2014, the European Commission published Ideas on how to ensure a simpler, more effective and more fraud-proof VAT system. See the staff working document (SWD 14/338), the press release (IP/14/1216) and the frequently asked questions (MEMO/14/607).
On 24 April 2012, the European Commission's services and delegates from the EU Member States met in the Group on the future of VAT ('GFV') to have a first broad exchange of views on the possible options for implementation of a VAT regime based on taxation at destination for the B2B supplies of goods.
The agenda, the Commission's working document and the report from the meeting are available from the dedicated page.
Green Paper on the future of VAT – Towards a simpler, more robust and efficient VAT system
On 1 December 2010, the Commission adopted a Green Paper on the future of VAT – Towards a simpler, more robust and efficient VAT system (COM(2010) 695 final
). A Commission Staff Working Document accompanied the Green Paper and provides a more detailed technical analysis for each of the themes covered (SEC(2010) 1455
The Green paper was followed by a six month public consultation on how the EU VAT system can be strengthened and improved to the benefit of all stakeholders. The Commission received 1726 replies from businesses, academics, citizens and tax authorities. This constitutes a record response to a tax consultation.
The European Parliament (EP), the European Economic and Social Committee (EESC) and the Tax Policy Group (who are the personal representatives of the EU's finance ministers) welcomed the Green Paper and confirmed the need to reform the VAT system.
Further information about the public consultation (consultation paper and all the reference documents) and its results (contributions and summary report) is available from the dedicated consultation page.
The full texts of the EESC Opinion and the EP Resolution are available online.
Conference: Green Paper on the Future of VAT
On 6 May 2011, the European Commission (Directorate General for Taxation and Customs Union) organised a one day conference in Milan on the Green Paper on the future of VAT - Towards a simpler, more robust and efficient VAT system.
This conference was an important part of the consultation process associated with the Green Paper. It brought together policy makers, experts, businesses and other stakeholders and the general public from all over Europe, and beyond.
More information about the conference (programme, presentations and speeches).
Evaluation of the VAT system
In parallel with the consultation process, the Commission contracted a study on a retrospective evaluation of the consequences, in economic terms, of the functioning of the most significant elements of the current EU VAT system, as identified in the Green Paper.
The full text of the study, its executive summary and the answers to the evaluation questions are available from the Studies page.