Commission proposes far-reaching reform of the EU VAT system
![](https://ec.europa.eu/newsroom/repository/picture/2017-41/20171012-news6_25927.jpg)
date: 12/10/2017
See also: European Commission - Press release
The Commission has launched plans for the biggest reform of EU VAT rules in a quarter of a century. The reboot announced on 4 October would improve and modernise the system for governments and businesses alike. Overall, over EUR 150 billion of VAT is lost every year. Of this, around EUR 50 billion - or EUR 100 per EU citizen each year - is estimated to be due to cross-border VAT fraud. This money can be used to finance criminal organisations, including terrorism. It is estimated that this sum would be reduced by 80% thanks to the proposed reform. The proposed VAT reform would also make the system more robust and simpler to use for companies across borders. Businesses trading cross-border currently suffer from 11% higher compliance costs compared to those trading only domestically. Simplifying and modernising VAT should reduce these costs by an estimated EUR 1 billion.