Have the article read by OpenAI (Beta). Please note that AI translations may take some time to process.Brussels (dpa) – European Union finance ministers agreed on Tuesday on new rules for value-added tax (VAT) on digital transactions aimed at tackling fraud and boosting competitiveness.
“Today’s agreement makes life easier for taxpayers, tackles fraud and promotes fair competition,” said the European Commissioner for Economy, Italian Paolo Gentiloni.
VAT, a tax added to nearly all goods and services bought and sold within the EU and sold into the EU, is an important source of income for member states, but loopholes in the current legislation meant that not all due payments were collected. “EU member states are still losing €61 billion [$66.5 billion] in VAT each year,” Gentiloni said.
Currently, companies have to inform the national tax authorities every few months about goods and services sold to companies in other EU member states that are taxable in the respective countries.
“This opens up a gap for fraudsters to exploit the difficulty authorities face in rapidly detecting suspicious or fraudulent transactions, since the data is incomplete and not available in real time,” a statement by EU finance ministers said.
Under the new regulation, which is to apply from 2030, companies will have to report every cross-border commercial transaction in real time via electronic invoices.
New rules will also apply to the so-called platform economy. Online accommodation rental and passenger transport services are to collect VAT directly from customers.
The new rules also mean that businesses trading in different EU countries will only have to register for VAT once for the whole bloc.
The new rules still need to be formally backed by the European Parliament and EU countries before they can enter into force. (5 November)
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