European Parliament backs EU VAT reform
- 31 October 2011 | Richard Asquith
Following the publication of the European Commission’s Green Paper on the EU VAT reform, the European Parliament has issued its views on the proposal. Its analysis of the Green Paper included the following points:
Update of EU VAT System
The Parliament backs the EC’s reform agenda, in particular the attempts to reduce the VAT administrative compliance burden and associated costs.
Closing VAT Fraud loopholes
Over the past 10 years, the Parliament has identified the increasing levels of VAT fraud as a major cause of lost revenues – it puts the amount as Euro 100 billion. A key component to eliminating fraud – in particular ‘Carousel Fraud’ would be the change of the rules on the Place of Supply
Simplification of reduced VAT rates
Cross Border VAT Compliance burden disincentive to single market objectives
The administrative burden placed on non-resident traders, doing business across European borders. Many traders instead turned to export markets outside of Europe as the administrative barriers appeared lower.