Brussels, 01/07/2008 (Agence Europe) - BusinessEurope, the confederation of European enterprise, has published a study showing that EU companies involved in crossborder transactions face higher advisory and compliance costs as well as risk exposure related to value-added tax (VAT) obligations than when they operate exclusively at domestic level. These difficulties fall into four categories: - fragmented implementation of the VAT Directive 2006/112/EC into national law; - enhanced reporting obligations for intra-Community supplies; - obstructions to deduction of input VAT, in particular in cross-border situations; - and interest and penalties levied by member states.
In order to facilitate the life of companies developing on the internal market, the employers' organisation recommends changes to Community law. For example, it suggests a reduction in the options for derogations granted to member states. “The backbone of the internal market, invoicing should be completely harmonised”, says Henk Wildeboer, head of the BusinessEurope VAT group and responsible for indirect taxation with Philips. The study notes major national differences in this field. France and Romania demand, for example, that invoices be prepared in the national language. Bulgaria makes it an obligation to sign invoices by hand. In the Czech Republic, the use of the national currency is the only option. Belgium, Italy and Poland have even defined very short times for issuing invoices which, if exceeded, may entail penalties. BusinessEurope therefore recommends adoption of a regulation determining the maximum requirements with regard to invoicing. This autumn, the Commission is expected to launch an initiative on electronic invoicing (see EUROPE 9670).
Other recommendations made by the European confederation include reduction of the bureaucratic cost for VAT declarations and acceleration of the procedures for obtaining input VAT deductions or refunds, for intra-Community supplies. It also calls for better management of the electronic system for exchange of information between tax authorities (VIES database). This database, which is neither completely accessible nor regularly updated, may contain erroneous information and is therefore not reliable, the organisation states in its report. It sees in a better light, however, the proposals due this autumn, which will aim to improve the reliability of the VIES database for a more effective fight against tax fraud (see EUROPE 9667). (M.B./transl.jl)