Partner Article

More European VAT red tape?

On 23 October, the European Commission is expected to announce a proposal for a single standardised VAT return applicable across all 28 EU Member States.

Among the proposals published in a previous feasibility study are:

• An ‘option’ for taxable persons to file a common EU standard VAT return (although the preference remains for a mandatory system for all businesses and all tax authorities).
• The content of the common VAT return having a significant increase from the current 9 boxes to up to 30 separate boxes to enter both net expenditure and applicable VAT in relations to (amongst others): sales and purchases at all applicable VAT rates both with and without a right to input tax recovery; and separate boxes for intra-EU and non-EU transactions. There were also a further 12 boxes proposed to identify corrections of errors of both the net and VAT values.
• Monthly filing and payment of the common VAT return by electronic format only. The proposal within the feasibility study is that there would be an optional derogation for quarterly filing for taxable persons with reported turnover of less than €2 million but, if filing quarterly, a prepayment of 1/3 of the VAT due over the previous quarter would have to be made.

Needless to say, the feasibility study identified that some tax authorities express doubt on whether a common EU standard VAT return would result in better harmonisation of VAT throughout the EU, with some tax authorities (including the UK) expressing a preference for keeping their existing national VAT returns.

Following the proposal on 23 October, the next step will be for tax authorities in each member state to agree the actual purpose of the common EU standard VAT return, agreeing to the design of its content, and ultimately introducing it in to each member state.

This was posted in Bdaily's Members' News section by Baker Tilly .