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IP/00/615 Brussels 14 June 2000 The Commission is proposing a new strategy to ensure the VAT system operates more efficiently within the internal market The European Commission has proposed a new strategy to bring about a pragmatic improvement in the VAT system. Its aim is to simplify and modernise the present VAT arrangements, standardise implementing rules in the Member States and ensure closer administrative cooperation between them to combat fraud. Frits Bolkestein, the Member of the Commission responsible for taxation and the internal market, has indicated that it is in no way the Commission's intention to question the idea of a definitive system of taxation in the country of origin as a long-term Community objective. However, in order to improve the functioning of the internal market in the short term there must be a review of the programme proposed by the Commission in 1966 to define a viable strategy focusing on four main objectives: simplification and modernisation of existing rules, more uniform application of the present arrangements and closer administrative cooperation. The Commission hopes this new strategy will create fresh impetus within the Council to adopt the much needed improvements to the current arrangements as quickly as possible. This will of course only be possible if all Member States are prepared to make changes to their national VAT systems which will help to bring about an overall improvement in the operation of the common VAT system. There will also have to be acceptance of the need for more effective control and administrative cooperation. The Commission proposes the following programme in its communication: Phase One: 2000 - adoption by the Council of proposals already tabled:
Phase Two: 2000 - Presentation of new proposals by the Commission The Commission will table proposals for directives in the following areas in the course of the year:
The Commission will also present the report on the application of the reduced VAT rate which it was asked to draw up. Phase Three: 2001 - Evaluation and definition of future priorities Future priorities will largely depend on the progress made by the Council in adopting the proposals already tabled. The Commission will present a progress report in early 2001 and, once it has been discussed by the Council, will use it to draw up a work programme setting future priorities. The areas already identified by the Commission and the Tax Policy Group where current legislation needs to be reviewed include the tax arrangements applying to public authorities and public activities, coordination between customs and taxation, in-depth review of the place of taxation of services, and standardisation of VAT rates. The communication can be found on the Europa site at: http://ec.europa.eu/taxation_customs/publications/official_doc/com/com.htm. |
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