VAT Action Plan: Commission presents measures to modernise VAT in the EU

The European Commission today presented an Action Plan setting out ways to reboot the current EU VAT system to make it simpler, more fraud-proof and business-friendly. Today’s Action Plan is the first step towards a single EU VAT area which is equipped to tackle fraud, to support business and help the digital economy and e-commerce. Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue said: “Today, we are starting a dialogue with the European Parliament and the Member States for a simpler and more fraud-proof VAT system in the EU. Every year, cross-border VAT fraud costs our Member States and tax payers about EUR 50 billion. At the same time, the administrative burden for small businesses is high and technical innovation poses new challenges for VAT collection. This Commission has already proposed clear measures to address corporate tax avoidance, and we will be equally decisive in tackling VAT fraud.” Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “VAT is a major source of tax revenue for EU Member States. Yet we face a staggering fiscal gap: the VAT revenues collected are €170 billion short of what they should be. This is a huge waste of money that could be invested on growth and jobs. It’s time to have this money back. We are also keen to grant Member States more autonomy on how to define their VAT reduced rates. Our Action Plan will deliver on each of these points.” For more information, see our full press material here. You can also watch Commissioner Moscovici‘s press conference here.