VAT-related points from the European Parliament resolution of 9 October 2025 on simple tax rules and fragmentation in EU competitiveness:
Context Overview
- The resolution emphasizes that simplified, predictable, and harmonized tax rules are essential for boosting EU competitiveness, reducing compliance costs, and supporting SMEs.
- It highlights the negative impact of fragmented and complex tax systems, which create barriers to cross-border investment, increase administrative burdens, and hinder economic growth.
- The Parliament calls for coordinated EU action to streamline tax procedures, reduce duplication, and improve digital infrastructure for tax administration.
VAT-Related Highlights
- VAT compliance gap remains significant: In 2022, the EU lost €89.3 billion in expected VAT revenue, with around 25% attributed to criminal VAT fraud.
- VAT burden and revenue: In 2023, VAT contributed 7.1% of EU GDP and 18.3% of total government revenue.
- Digitalisation and e-invoicing: The resolution stresses the role of electronic invoicing in improving transparency, reducing administrative burdens, and enabling efficient use of reported VAT data.
- Call for simplification: The Parliament urges the Commission to streamline VAT refund procedures, harmonize Tax Identification Numbers, and reduce reporting requirements — especially for SMEs.
- EU Tax Data Hub proposal: A centralized system is proposed to enhance automatic exchange of VAT and other tax information, building on existing tools like VIES and EMCS.
Source European Parliament
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