Brussels, 23/10/2013 (Agence Europe) - On 23 October, the European Commission unveiled a draft directive to introduce a standardised VAT return in the European Union by 2017 that will replace the 28 versions currently in use, thus ensuring companies provide the same basic information within the same deadlines across the EU. This should reduce red tape and administrative costs for the submission of the 150 million or so company VAT returns in the EU every year, thus leading to savings of up to €15 billion euros for the companies in question, explains the Commission. By introducing simpler and more uniform rules, there should be better respect of VAT declaration obligations and more effective collection of VAT by tax offices, allowing the member states to recover some of the lost VAT income (estimated at €183 billion across the EU in 2011).
Along with the VAT identification number and the tax period, the new form (to be completed in the language of the person liable for VAT) now has only five boxes - VAT to be paid, deductible VAT, balance between VAT to be paid minus deductible VAT, total sales and total purchases. Member states may, however, add up to 21 further boxes of their own. The new form will be much simpler than current returns, which range from 6 boxes in Ireland to more than 100 in other countries and 586 in Italy. There will be harmonisation of time periods for declarations, procedures, corrections and the format of electronic tax returns. Companies will have to lodge VAT returns monthly, apart from micro-enterprises with a turnover of less than €2 billion, which will be able to lodge them quarterly. The requirement found in some countries to make an annual summary of VAT will be scrapped. The draft directive will now go to the Council of Ministers and European Parliament and, if all goes to plan, it will come into force on 1 January 2017. (FG/transl.fl)