VAT in the Digital Age Proposals Published by the European Commission
The European Commission have released their long-awaited VAT in the Digital Age update.
Originally scheduled for November but pushed back until the 8th December, VAT in the Digital Age is the EU Commission’s bid to modernise VAT rules in line with the growing trend towards digitalisation.
There have been three drivers for this change, including:
- Reduction of VAT gap.
- Simplification & increased efficiency of VAT compliance processes.
- Improved data analysis and financial forecasting.
Three Key Changes for VAT in the Digital Age
The EU Commission proposes three big changes to the way countries and businesses handled VAT.
These include:
- A New Real Time Digital Reporting System Based on E-invoicing.
- Updated VAT Rules for the platform economy.
- A single VAT Registration for businesses selling to consumers across the EU
These changes could “recoup up to €11bn in lost VAT revenues a year for the next ten years” for Member States. Additionally, businesses could save around €4.1bn per year on compliance costs across the next decade.
“Modernising how companies account for VAT in cross-border business, removing cumbersome administrative procedures and streamlining processes for all. At a stroke, the new system makes sure that Member State authorities are fully informed of transactions in almost real time, allowing them to immediately address instances of VAT fraud.”
-European Commission
For further details on the EU Commission’s proposal click here.
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