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EC adopts draft definitive VAT regime Directive

  • May 24, 2018 | Richard Asquith

EC adopts draft definitive VAT regime Directive

The European Commission today adopted a new draft EU VAT Directive for the operation of the definitive VAT system. This includes changing to a destination-based VAT regime, and withdrawing zero-rating on intra-community supplies. The aim is to help eliminate and estimated €50billion in VAT fraud, particularly carousel fraud.

The new draft includes over 200 amendments to the existing VAT Directive 2006/112/EC. The changes the new Directive includes:

  • Withdrawal of zero-rating intra-community supplies on B2B transactions. Instead, vendors will be required to charge the VAT rate of the customer (defined by where the transport ends).
  • Introduction of the One-Stop-Shop portal (based on the MOSS portal) for the VAT charged on the above to be recording and paid in the home country of the vendor
  • Enforcing the VAT invoicing rules of the vendor’s country on such transaction 

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.