Unlocking e-commerce in Europe and the creation of a Digital Single Market are among the top priorities of the Juncker-Commission.
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.
These 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 if no action is taken.
In particular, the Commission proposed:
- 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.
- Press release - Commission proposes new tax rules to support e-commerce and online businesses in the EU
- Questions and Answers on VAT for e-commerce
- Statement by Vice-President Ansip