Expected review of EU VAT and customs rules in 2022
On 19 October 2021, the European Commission adopted its 2022 Commission Work Programme designed to rebuild a post COVID-19 Europe, accelerate the twin green and digital transitions, and build a fairer and more resilient society.
The work programme addresses the review of VAT and Union customs rules under the six priority objectives "An economy that works for people", which is necessary in particular because of the spread of digitalisation.
The review will cover the legislative framework including impact assessment.
"VAT in the Digital Age"
This initiative aims to modernise the current VAT rules, taking into account the opportunities offered by digital technologies.
The Commission’s action plan for fair and simple taxation underlined the need to reflect on how technology can be used by tax authorities to fight tax fraud and benefit businesses, and whether the current VAT rules are adapted to doing business in the digital age.
The Action Plan, entitled "VAT in the Digital Age", announced a legislative proposal for 2022, which includes:
1) VAT reporting obligations and e-invoicing,
2) VAT treatment of the platform economy and
3) single EU VAT registration.
The package is expected to harmonise and promote the provision of cross-border supplies in the single market, and to help improve tax collection and therefore ensure sustainable revenues during the COVID-19 recovery.
The review is scheduled to take place in the 3rd quarter of 2022.
Revision of the Union customs legislation
The Union customs code is facing situations for which it was not conceived, notably e-commerce.
The revision of the Union customs legislation will aim at improving the controls of e-commerce to the benefit of tax payers (collection of duties and taxes) and citizens (protection against non-compliant products).
It will facilitate the enforcement tasks of national authorities and improve the level laying field for economic operators, notably with the assistance of new actors such as platforms.
In other areas the revision will foresee a better allocation of tasks and improved exchange of information between customs and sectorial authorities so that customs authorities and the Commission are in a position to use more electronic customs data to improve the efficiency of their controls of financial and non-financial risks, thereby reducing the burden on economic operators. In yet again other areas, certain simplifications will be foreseen for economic stakeholders.
The review is scheduled to take place in the 4th quarter of 2022.
(Source: Commission Work Programme 2022 | European Commission (europa.eu))
2 Dec. 2021.
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