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EU to move towards single VAT system

[ April 8, 2016   //   ]

European Commission nomic and Financial Affairs Commissioner Pierre Moscovici unveiled plans to improve the EU VAT system, including a single VAT area, in Brussels on 7 April.

He pointed out that the current VAT system for cross-border trade which came into force in 1993 was intended to be a transitional system and is vulnerable to fraud. In 2017 the Commission plans to lay the groundwork for a single European VAT area. Cross-border transactions would continue to be taxed at the rates of the Member State of destination (‘destination principle’) but tax collection would be gradually changed towards a more fraud-proof system.

The Commission will also by the end of 2016 produce a proposal to modernise and simplify VAT for cross-border e-commerce as part of the Digital Single Market strategy.

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