The European Commission published its new VAT Action Plan on 7 April 2016. The aim of the European Commission is to make the VAT system future proof. Actions will be taken to combat VAT fraud in short notice, to decrease the VAT compliance costs for SMEs and to adapt the VAT system to the digital economy. Furthermore, a ‘definitive’ VAT system for cross-border trade of goods will be proposed, based on the principle of taxation in the country of destination of the goods. The VAT Action Plan also proposes to give more freedom for Member States’ VAT rates policies.

Legislative proposals from the European Commission are to be expected in 2016 and 2017. We will monitor this very closely and will obviously inform you of any further developments.