The European Commission has recently published `The Action Plan on VAT` to modernise and simplify VAT rules for cross-border ecommerce by the end of 2016.
Aiming also to foster cross-border ecommerce, the Commission`s Action Plan lays out key actions to remove, harmonise and simplify VAT-related obstacles to ecommerce, to tackle the VAT gap by improving cooperation between tax administrations and to establish a definitive VAT regime for cross-border trade, ecommerce-europe.eu reports.
According to the preliminary analysis of the Ecommerce Europe`s `Cross-border E-commerce Barometer 2016`, different taxation systems, VAT rules/rates and customs still represent a difficult barrier for 48% of companies selling abroad due to high VAT-related accounting and administrative costs.
Moreover, it causes difficult VAT registration and declaration procedures, legal uncertainty and general unawareness of VAT rules, as well as lack of information on VAT rules, difficulties in dealing with foreign taxation authorities (i.e. language) and practical problems in displaying the correct final price, including the correct VAT rate.
The Commission plans to implement the extension of the current Mini One Stop Shop to all cross-border ecommerce (including distance sales), besides the introduction of common EU-wide simplification measures to help small start-up ecommerce businesses, the streamlining of audits and the removal of anti-competitive VAT-related exemption measures for third country suppliers.
As part of the Digital Single Market strategy, the Commission will also present an additional package aimed at supporting the growth of SMEs through simplifying the VAT-structure in 2017.
The Commission will ask the European Parliament and Council to provide political guidance and confirm their support of the proposals presented in the Action Plan on VAT before presenting legislative proposals before the end of 2016 – 2017.