Brussels, 28/03/2000 (Agence Europe) - The European Commission will debate, this Wednesday, possibilities for modernising the value added tax regime (VAT). Four years ago, the Commission planned for 2000 the transition to a new common VAT system based on the principal of taxation in the country of origin. Today, it noted that the "present climate" and notably, "the Member States refusal to align their VAT rates and reduce the number of special regimes," prevent the progress towards this objective. Therefore, it is considering, to improve the working of the internal market in the short-term, establishing a new strategy based on four central objectives: the simplification and modernisation of the existing rules, a uniform implementation of the provisions enforced and the strengthening of administrative co-operation.
Through this review, the Commission intends raising within the Council political momentum needed to carry out the reforms. Recently, "we have had no success on the different proposals made to the fifteen," noted a Commission civil servant. Four projects for the simplification of the VAT regime are on the table in the Council for the last months, or even years. "The Member States are not ready to move to the original tax regime, as they do not have sufficient trust to mutually trust each other to collect their indirect taxes, explains a spokesperson for the European Commissioner for Taxation, Mr. Bolkestein. Therefore, the Commission has chosen a pragmatic approach."
A first meeting with the Member State representatives showed "that nearly all the Member States support the Commission's ideas, but that there are nuances on each of their priorities," commented a national delegate. The debate continued at a Ministerial level during the informal meeting of the Economic and Finances Committee, on the 7 and 8 April in Lisbon. The Commission then foresees making VAT proposals on postal services, end April, and on commercial transactions on the Internet in May.
For the European Commission, the "long-term" objective still remains the establishment of a single taxation area, the only appropriate formula to a true common market.