- We welcome the opportunity to provide our feedback on the VAT in the Digital Age proposal of the European Commission.
- We fully support the European Commissions ambition to improve the VAT system through the use of digital tools, reducing VAT-related barriers for cross-border trade in the EU and making the VAT system better for businesses, while also more resilient to fraud. We believe the VAT in the Digital Age proposal is well placed to embrace digitalization, supports a swifter transition towards Real-Time Economy, and effectively address the challenges faced by businesses (and in particular by SMEs) who trade, or have ambitions to trade, across the EU borders.
- This is well reflected in the proposal through: The expansion of the Union One Stop Shop (UOSS) and the introduction of a transfer module allow businesses to use one single VAT registration to report transfers of their inventory to locations across the EU, as well as the onward sales in those locations. We strongly encourage Member States to reach a consensus on this pillar, as it would be a pivotal tool to reduce the need for costly, time-consuming, and often prohibitive need for businesses wanting to sell products across the EU to maintain multiple VAT registrations. Amendments to the text of the proposal should be in line with the north star goal of reducing the VAT administrative burden for businesses. To achieve this, it is key that there is no (or very limited) negative VAT cash flow impact when businesses opt to report through the UOSS and the transfer module. Any newly introduced obligations for businesses and electronic interfaces facilitating the transfer and/or the sale of goods should be proportional and ensure a level playing field.
- A shift to real-time digital reporting based on e-invoicing for businesses that operate cross-border in the EU and a more harmonized framework for domestic transactions. We welcome the ambition to harmonize EU digital reporting requirements, as the current fragmentation of digital reporting and e-invoicing standards around the EU is causing an immense burden on businesses and is a threat to the Single Market.
- However, as the proposal focuses solely on creating a harmonized invoice format, it misses a key opportunity to harness the full business and economic benefits that could come from the harmonization of transmission protocols and technical specifications for digital reporting.
- The transition to real-time reporting will require considerable investments from businesses in the initial phase, but the ultimate goal should be to reduce administrative costs for businesses. The real-time, transaction-specific, structured data should also be usable by companies. It should be made sure that the company’s financial management systems work smoothly with the official reporting systems.
- Digitization should promote the Real-Time Economy (financial transactions and processes are digital and based on structured data). As technical discussions progress, we encourage the EU Commission and EU countries to consider a pragmatic and phased approach to agreeing and adopting this proposal, as it includes a large number of VAT reforms that may take a long time to agree on all at once.
- To strengthen the EU Single Market and remove blockers for cross-border trade, the most urgent action is needed to ensure the implementation of the single VAT registration concept, including the introduction of the transfer module and the expansion of the Union One Stop Shop scheme. Please check the rest of the responses in the attachment.
Source ec.europa.eu
Input by other organizations into the public consultation
- EESPA
- InHouse Tax Forum (Belgium)
- Italian Banking Association (ABI)
- ETNO/GSMA
- DATEV eG
- Siemens AG
- Sovos
- EuroCommerce
- Inter IKEA Group
- FedEx Express
- IDW Institut der Wirtschaftsprüfer in Deutschland e.V.
- EU Travel tech
- Business Europe
- MDDP
- PwC
- TEI
- EFAMA
- INDEPENDENT RETAIL EUROPE
- Finnish Commerce Federation
See also – The Library of VAT in the Digital Age (VIDA)
Join the LinkedIn Group on ”VAT in the Digital Age” (VIDA), click HERE
Follow us on
