The European Commission wants to introduce reforms to combat VAT fraud, including in digital services. “VAT is one of the most important sources of income for our member states,” said Economics Commissioner Paolo Gentiloni at the presentation of the proposed legislation on Thursday. In 2020, however, the countries lost 93 billion euros in VAT – among other things because of fraud.
The reform aims to change that. Among other things, the EU Commission is proposing an electronic reporting system for VAT. According to the proposal, companies would have to report every cross-border trade transaction in real time via electronic invoices. States could also voluntarily introduce this system domestically.
According to Gentiloni, the states could immediately intervene in suspicious transactions through the real-time reporting system. At the moment, the information is not being provided quickly enough. Overall, the Commission estimates that the federal states will be able to collect an additional eleven billion euros per year over the next decade.
In addition, VAT should be collected more efficiently on online platforms for renting apartments, such as Airbnb or Booking. According to the Commission’s proposal, such platforms will have to collect VAT in the future if the service provider – such as the landlord of a holiday home – does not do so. The reform also stipulates that companies trading in different EU countries only have to register for VAT purposes in one country for the entire EU. This is intended to benefit small and medium-sized companies in particular, which would otherwise have to pay high administrative costs.
The EU Commission also proposed reporting requirements for cryptocurrency transactions, so that states can collect taxes if profits are made from trading or investing in cryptocurrencies – just like with other financial assets. The projects will now be presented to the EU Parliament and the EU states. (dpa)