Commission adopts a set of proposals on Value Added Tax

Further information:

The first proposal aims to update the procedure and provide more flexibility for Member States to set VAT rates. The existing process requres unanimous agreement by all Member States and there were historical exemptions that applied in some countries, but not others. The second draft law intends to cut VAT compliance costs, particularly when trading in other Member States.

Background information:

These proposals are the final steps of the general overhaul of VAT rules put forward by the European Commission. They follow up on the release of an VAT Action Plan in April A2016 - setting out ways to reboot the existing EU VAT system - and a further Communication assessing progress in October 2017.

The European Commission adopted on 18 January 2018 a set of proposals acting upon the flexibility given to Member States to set Value Added Tax (VAT) rates, in particular relating to the activity of small and medium enterprises (SMEs).

+ Proposal amending Directive 2006/112/EC as regards rates of value added tax [COM(2018)20];

+ Proposal amending Directive 2006/112/EC on the common system of value added tax as regards the special scheme for small enterprises [COM(2018)21].

European Commission: Questions and Answers on the VAT package http://europa.eu/rapid/press-release_MEMO-18-186_en.htm

Reuters, 17.01.18: EU expected to give states more leeway to cut sales tax rates https://uk.reuters.com/article/idUKKBN1F61A6

European Commission: Remarques du Commissaire Moscovici à la conférence de presse sur les taux de TVA et les PMEs http://europa.eu/rapid/press-release_SPEECH-18-351_fr.htm

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