The European Commission has today unveiled a series of measures to improve the Value Added Tax (VAT) environment for e-commerce businesses in the EU. Our proposals will allow consumers and companies, in particular start-ups and SMEs, to buy and sell goods and services more easily online.
By introducing an EU wide portal for online VAT payments (the 'One Stop Shop'), VAT compliance expenses will be significantly reduced, saving businesses across the EU €2.3 billion a year. The new rules will also ensure that VAT is paid in the Member State of the final consumer, leading to a fairer distribution of tax revenues amongst EU countries. Our proposals would help Member States to recoup the current estimated €5 billion of lost VAT on online sales every year. Estimated lost revenues are likely to reach €7 billion by 2020 and it is essential that we act now.
Finally, the Commission is delivering on its pledge to enable Member States to apply the same VAT rate to e-publications such as e-books and online newspapers as for their printed equivalents, removing provisions that excluded e-publications from the favourable tax treatment allowed for traditional printed publications.
Andrus Ansip, Vice President for the Digital Single Market, said: "We are delivering on our promises to unlock e-commerce in Europe. We have already proposed to make parcel delivery more affordable and efficient, to protect consumers better when they buy online and to tackle unjustified geo-blocking. Now we simplify VAT rules: the last piece in the puzzle. Today's proposal will not only boost businesses, especially the smallest ones and startups, but also make public services more efficient and increase cooperation across borders."
Pierre Moscovici, Commissioner for Economic Affairs, Taxation and the Customs Union, said: "Online businesses operating in the EU have been asking us to make their lives simpler. Today we're doing that. Companies big and small that sell abroad online will now deal with VAT in the same way as they would for sales in their own countries. That means less time wasted, less red tape and fewer costs. We're also simplifying rules for micro-businesses and startups, allowing them to tap new markets more easily. Our proposals mean that European governments stand to gain an additional €100 million a week to spend on services for their citizens."
Today's proposals embrace a new approach to VAT for e-commerce and follow up on the commitments made by the European Commission in the Digital Single Market (DSM) strategy for Europe and the Action Plan towards a single EU VAT area.
In particular, we propose:
New rules allowing companies that sell goods online to deal easily with all their EU VAT obligations in one place;
To simplify VAT rules for startups and micro-businesses selling online, VAT on cross-border sales under €10,000 will be handled domestically. SMEs will benefit from simpler procedures for cross-border sales of up to €100,000 to make life easier;
Action against VAT fraud from outside the EU, which can distort the market and create unfair competition;
To enable Member States to reduce VAT rates for e-publications such as e-books and online newspapers.
These legislative proposals will now be submitted to the European Parliament for consultation and to the Council for adoption.
page source http://europa.eu/
