Brussels, 09/03/2016 (Agence Europe) - In 2017, the European Commission will present a proposal for a first step towards defining a definitive VAT system based on the principle of destination, according to a draft action plan it is to present on Wednesday 16 March and of which EUROPE has had sight.
In this first stage, the principle of taxation of cross-border supplies will be re-established and the One Stop Shop extended to cover cross-border supplies of goods from business to consumers. Businesses would still be liable for VAT on goods purchased from other EU countries.
As a second step, taxation would cover all cross-border supplies in the single market. This would mean that the supply of goods or services, either domestic or cross-border, would be treated in the same way. This would require a “qualitative leap in cooperation” between the member states, the Commission explains, adding that the definitive system could not be fully implemented until the member states considered that the qualitative leap had been achieved.
At this stage, the Commission is not expected to state whether or not it will agree to the Czech Republic's request to carry out a pilot project for a generalised reverse-charge mechanism, in order to fight VAT fraud. It will most likely go no further than to say that it will look into the economic, legal and political implications of this request before presenting its conclusions. Finally, the Commission will propose a reform of VAT rates in 2017. Two options are being looked into (see EUROPE 11506). (Original version in French by Elodie Lamer)