The European Commission has indicated that it may drop a plan announced in 2013 to introduce a standard VAT return across all EU member states.
The Commission recently released its 2016 Work Programme. It announced that, during next year, it will release an action plan on VAT return, to create an efficient, fraud-proof, and definitive regime. In addition, it will launch initiatives on VAT rates and the VAT treatment of e-commerce in the context of the Digital Market Market agenda.
Thereafter, it announced: “We also intend to withdraw a number of VAT proposals on the table that have made little progress in the Council or where their significant simplification potential has been unacceptably watered down, as is the case for the standard VAT declaration.
In October 2013, the Commission had announced the launch of a project to develop a standard VAT return for adoption by all member states to cut the cost of compliance by approximately EUR15bn (USD16.4bn) annually, based on projections that year.
The proposal for the standard return, which has yet to be formally withdrawn, would have seen national VAT returns replaced for a standardized return. This would require businesses to provide the same basic information with the same deadlines regardless of their location within the European Union.
The standard VAT return would have had only five compulsory boxes for taxpayers to fill in. Member states would have been allowed to request a number of additional standardized elements, up to a maximum of 26 information boxes. This would have been a vast improvement on the current situation, whereby some member states require up to 100 information boxes to be completed.
The proposal for a standard VAT return across the European Union was introduced as part of the European Commission’s work to create a more efficient and fraud-proof VAT system, as set out in its December 2011 Communication on the future of VAT. The Commission has provided no indication of the issues that appear to have scuppered its implementation.
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