Modernizing VAT for Crossborder Ecommerce
The European Commission has launched a public consultation to help identify ways to simplify the value-added tax (VAT) payments on crossborder ecommerce transactions in the European Union.
The commission is seeking a range of views from business owners and other interested parties before it drafts legislative proposals on the topic in 2016, as part of the Digital Single Market strategy.
The consultation will run for 12 weeks and end on 18 December 2015.
“We promised to support companies, and especially smaller ones, to reduce burdens arising from different VAT regimes,” said Andrus Ansip, European Commission Vice-President for the Digital Single Market. “Today we ask businesses and other stakeholders to help find the most effective and meaningful ways of delivering on this promise.”
With the Digital Single Market Strategy the commission is working to minimize burdens attached to crossborder ecommerce arising from the different VAT regimes within the EU. It wants to provide a level playing field for EU companies, big and small, and ensure that VAT revenues flow to the country where the consumer is based.
“This consultation presents a real opportunity to ensure that future VAT revenues from the digital economy are distributed fairly and effectively,” said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs. “At the same time, we want to make it as easy as possible to comply with the rules. We also have an interest in ensuring that future legislation reflects the reality for businesses across the EU.”
The commission will make a legislative proposal in 2016 to reduce the administrative burden on businesses arising from different VAT regimes. The commission will propose extending the current single electronic registration and payment mechanism to cover the sale of tangible goods; introducing a VAT threshold to help online startups and small businesses; allowing cross-border businesses to be audited only by their home country for VAT purposes; and removing the VAT exemption for the import of small consignments from suppliers in third countries.