The European Parliament has voted to support plans to introduce a new standard VAT return across the EU, which would replace national VAT returns, simplify the paperwork for cross-border activities and could cut costs for EU businesses by up to €15bn (£12bn) a year report Harris & Co accountants Northampton
The switch to a single VAT return is a key element in the European Commission’s initiative to slash red tape for businesses, ease tax compliance and make tax administrations across the EU more efficient. Under the proposals agreed in the European Parliament, there would be a uniform set of requirements for businesses filing their VAT returns, regardless of which member state they are in. This would ensure that businesses are asked for the same basic information, within the same deadlines, right across the EU.
The declaration will have only five compulsory boxes for taxpayers to fill in. Member states will be able to request a number of additional standardised elements, up to a maximum of 26 information boxes. In comparison, some current VAT returns in some member states require up to 100 information boxes to be completed.
Algirdas Šemeta, commissioner for taxation, said:
‘The standard VAT return presents a win-win situation. Businesses will enjoy simpler procedures, reduced costs and less red tape. Governments will have a new tool to facilitate VAT compliance, which should increase the revenues they collect.’
Businesses will file the standard VAT return on a monthly basis, while micro-enterprises will have to comply on a quarterly basis.
Moving forward the system will also be modernised with electronic filing available across the EU.