The European Commission on September 25 launched a public consultation seeking stakeholder input on reform of the EU’s VAT system relating to cross-border e-commerce.
The consultation follows up on a paper,”A Digital Single Market Strategy for Europe,” published May 6, which expresses the Commission’s commitment to propose legislation in 2016 to make the EU VAT rules for cross-border transactions simpler and fairer.
Specifically, the strategy document recommends EU-wide legislation to:
- Extend the current single electronic registration (i.e. the Mini One Stop Shop) and payment mechanism to intra-EU and non-EU member state online sales of tangible goods,
- Introduce a common EU-wide VAT threshold to help small start-up e-commerce businesses,
- Allow for home country controls including a single audit of cross-border businesses for VAT purposes, and
- Remove the VAT exemption for the importation of small consignments from suppliers in non-EU member states.
The Commission is also seeking comments on the current VAT rules for business-to-consumer cross-border supplies of goods and services; on the implementation of rules which, as of January 1, required VAT to be levied for telecommunications, broadcasting, and electronic services based on where the customer is located; and on the implementation of the Mini One Stop Shop.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said that the consultation seeks to ensure that future VAT revenues are distributed fairly and effectively and that the rules are as easy as possible to apply. “We also have an interest in ensuring that future legislation reflects the reality for businesses across the EU,” he said.
The consultation will run until December 18 .
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