The European Commission has announced that it is assessing different options for a new EU VAT regime for business-to-business (B2B) supplies of goods based on taxation at destination.
The work is a step toward the goal of an overhaul EU VAT rules, which are prone to fraud and are highly complicated for cross-border businesses, the Commission said in documents published October 30. Once significant progress is made implementing the principle of destination for B2B supplies of goods, rules applicable to other intra-EU supplies, such as the VAT treatment of services and business-to-consumer supplies may be addressed.
The following options for a new regime are under consideration:
- The supplier would be responsible for charging and paying the VAT, and supplies would be taxed according to where the goods are delivered
- The supplier would be responsible for charging and paying the VAT, and supplies would be taxed according to where the customer is established
- The customer – rather than the supplier – would be liable for the VAT, and taxation would take place where that customer is based (Reverse Charge)
- The customer – rather than the supplier – would be liable for the VAT, and taxation would take place where the goods are delivered
Also under consideration is a proposal to maintain the status quo, with some modifications.
The Commission said it concluded, after much political and technical consultation, that changing to a VAT system based on taxation at origin would not be achievable and that any definitive regime must be based on the principle of destination.
The Commission intends to assess the options and publish a report on its findings Spring 2015.
See,
Related article:
