EU political consensus on standard VAT return
- European News
- Jun 24, 2014 | Richard Asquith
On Friday 20 June 2014, political consensus was reached by the EU member states on the proposed implementation of a standard EU VAT return for all 28 member states.
Simplified EU VAT returns
The proposal for a single VAT return design was launched by the European Commission on 23 October 2013. The idea is for all countries to use the same 5 compulsory boxes for tax payers to complete, with an additional maximum 26 optional boxes for member states to choose from. This compares to the correct state where the number of boxes varies from four to over 100. This constitutes a real barrier to companies attempting to sell across EU member states’ borders, and undermines the single market principle.
The returns would submitted on a monthly basis, which a quarterly exemption from businesses below €2m. Annual VAT returns, currently required by countries such as Germany and Italy, would be abolished.
ECOFIN agrees to standard VAT return
On Friday, ECOFIN, the EU’s gathering of national finance minister meet in Luxembourg and agreed to back the measure. It formally endorsed the draft Directive on the new return.
This does not guarantee that the measure will be implemented by the target January 2017 date. But it is a significant advancement. Some countries are still objected to the loss of ability to gather extra information through the VAT return process which helps fight VAT fraud. Other countries, such as the UK, are concerned at forcing companies to complete monthly instead of quarterly returns as at present.