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Standard VAT Return: Easing life for businesses and improving tax compliance
05 November 2013
A new standard
VAT return, which can cut costs for EU businesses by up to €15 billion a year,
has been proposed by the European Commission. The aim behind this initiative,
which foresees a uniform set of requirements for businesses when filing their
VAT returns regardless of the Member State in which they do it, is to ease tax
compliance and make European administrations more efficient, reflecting the
Commission's commitment to smart regulation.
VAT return, which can cut costs for EU businesses by up to €15 billion a year,
has been proposed by the European Commission. The aim behind this initiative,
which foresees a uniform set of requirements for businesses when filing their
VAT returns regardless of the Member State in which they do it, is to ease tax
compliance and make European administrations more efficient, reflecting the
Commission's commitment to smart regulation.
The
standard VAT return – which will replace national VAT returns – will ensure
that businesses are asked for the same basic information, within the same
deadlines, across the EU.
Every
year, 150 million VAT returns are submitted by EU taxpayers to national tax
administrations. Currently, the information requested, the format of national
forms and the reporting deadlines vary considerably from one Member State to
the next.
This
makes VAT returns for cross-border businesses a complex, costly and cumbersome
procedure.
Businesses
operating in more than one Member State have also complained that it is
difficult to remain VAT compliant, due to the intricacy of the process.
This
proposal is also an important contribution to creating a more efficient and
more fraud-proof VAT system, as set out in the Commission's Strategy for VAT
reform. VAT accounts for around 21% of Member States revenues, and yet around
€193 billion went uncollected in 2011. By creating an easier system for both
taxpayers and administrations to work with, the standard VAT return can improve
tax compliance and reduce the VAT Gap. As such, today's proposal could make an
important contribution to fiscal consolidation across the EU by increasing
income to the public purse.
