Harmonisation of VAT rates?
Is the Commission planning a standard rate across the EU?
Saturday, December 5, 2009
One of the causes of many problems for businesses, is the many incompatibilities between the accounting systems of suppliers and recipients; under this proposal invoices, including those involving purely domestic transactions, must be recognisable in all member states.
Also seen as problematic are the differing VAT rates between member states, and exemptions. This presents, of course, an opportunity to raise the thorny issue of harmonisation of VAT levels across the EU. The suggestion that both parties in any transaction must list both VAT registration numbers might be seen to be slightly at odds with the stated aim of reducing red-tape.
On the fraud-fighting front, the Commission proposes that all VAT invoices are to be kept for 6 years – at present there are different practices in member states – and they may be stored electronically. Article 249 of the new proposal states that the records of one member state may be accessed by authorities in another member state. This will certainly raise concerns in a number of member states, where there are reservations about the integrity of the judiciary and law enforcement agencies in certain other member states.
The proposal is still in its early stages, but the new Commission might find this one will not sit well the Anglo-Saxon mindset, and in the light of Van Rumpuy's suggestions about raising new taxes, might be viewed with some suspicion many of those member states that struggle to keep taxes low for political reasons.
