The European Commission (EC) has presented an Action Plan setting out ways that will make it tougher for fraudsters to perpetrate trade-based VAT frauds.
The EC wants to reform the current EU VAT system to make it simpler, more fraud-proof and business-friendly.
Single EU VAT area
The Action Plan is the first step towards a single EU VAT area, which according to the EC, will be equipped to tackle fraud, support business and help the digital economy and e-commerce.
EC Vice-President Valdis Dombrovskis, said that every year, cross-border VAT fraud costs EU member states and taxpayers about EUR 50 billion.
At the same time, the administrative burden for small businesses is high and technical innovation poses new challenges for VAT collection.
The commission has already proposed what it describes as clear measures to address corporate tax avoidance, and Dombrovskis says the EC will be “equally decisive in tackling VAT fraud.”
According to EC commissioner for economic and financial affairs, taxation and customs Pierre Moscovici, “VAT is a major source of tax revenue for EU Member States.”
“Yet we face a staggering fiscal gap: the VAT revenues collected are EUR 170 billion short of what they should be,” he said.
For more information:
Memo on the Action Plan on VAT
Categories: Trade Based Financial crimes News