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New group gives fresh impetus to future of VAT in EU

The VAT Experts Group, which the European Commission set up after the publication of the communication on the future of VAT in December 2011, has new members.

Twenty-two industry associations and professional services firms, and 36 individuals have been chosen to advise the Commission on the development and implementation of VAT policy in the EU.

The firms and associations include the Tax Executives Institute; the International Chamber of Commerce; BusinessEurope, the confederation of employers’ organisations; professional bodies of tax advisers from the UK, Ireland and the Slovak Repubic; as well as Baker & McKenzie and three of the big-four global accounting firms.

Tax executives in the expert group include Chris Needham, GE’s global VAT/GST director; Karl-Heinz Haydl, the same company’s European VAT Policy Coordinator and Eamonn Keane, of NM Rothschild. Well-known practitioners in the group are Ine Lejeune, of PwC; Stefan Maunz of Kuffner, Maunz, Langer and Zugmaier; and Odile Courjon of Taj.

The new group, which meets for the first time on October 24, has much to consider in the December 2011 communication.

In the document, the Commission recommended that VAT should be based on the destination, rather than the origin, of goods and services. It also committed itself to broaden the base for VAT by examining what exemptions and reduced rates could be removed, with a particular emphasis on those that cause distortions in the internal market. A mini one-stop shop, allowing companies to pay and declare VAT in the country in which they are established rather than every jurisdiction in which they do business, is another key part of the proposed reforms.

The document also said the Commission would look at methods to combat VAT fraud and increase automated access to information, as well as explore the possibility of creating an EU cross-border audit team to facilitate and improve multilateral controls. The Commission also wants to encourage member states to increase compliance by enhancing their relationship with companies and their VAT procedures.

It also proposed a standardised VAT declaration available in all languages and an online portal with free information to companies on registration, invoicing, returns, rates and exemptions.

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