On 16 February 2022, the European Parliament (EP) voted in favour of harmonising pan-EU e-invoicing and expanding the scope of the VAT One-Stop Shop (OSS).
The EP calls for a move towards the definitive VAT system which means a move to charging VAT on intra-EU movements of goods based on the destination country.
The move to the definitive VAT system means that the businesses need to report and pay VAT of all the EU Member States (MSs) where they have (cross-border) B2B sales instead of reporting zero-rated intra-Community supplies in the MS of departure and their business purchaser self-charging VAT on the purchase as under current system.
In order to ease the VAT compliance of the businesses operating cross-border in the EU and make it possible for them to report VAT of all those various EU MSs of destination of their goods, the move to the definitive VAT system needs to be accompanied by harmonizing of pan-EU e-invoicing systems and expanding of the OSS.
Source Grant Thornton
