In January 2016, the European Commission published a Roadmap for an Action Plan, to set out a direction for future work towards a simple, efficient and fraud-proof definitive system of VAT tailored to the single market.

The Action Plan will take stock of the achievements made since the 2011 Communication on the future of VAT and will set out the direction for future work. In particular, it will set out the main features of the definitive VAT regime for intra-EU trade that the Commission wants to propose and the methodology it intends to use. In particular, the initiative is intended to address:

  • the difficulties arising from the VAT treatment of intra-EU trade under the current system and its exposure to fraud
  • the VAT rates structure and levels and
  • simplification of the VAT system to reduce compliance costs to businesses and reduce mistakes, tax avoidance and fraud.

The Commission intends to gather further information through public consultations and communications with the Group on the Future of VAT, representatives of business, tax practitioners and academics.

Details of the Roadmap are available to view here.