A public consultation has been launched by the European Commission (EC) to improve VAT for cross-border e-commerce transactions in the European Union (EU).

The consultation aims to seek advice from business owners and representative parties ahead of legislative proposals aimed at the digital single market next year.

The Commission is aiming to collect feedback on Mini-One Stop Shop (MOSS), which was implemented to help businesses sell digital services in multiple EU states will still declaring and paying VAT in their home country.

The consultation will seek advice from businesses and other representative parties on:

• the current VAT rules for cross-border supplies of goods and services
• implementation of this year’s VAT changes of supply rules and MOSS
• extend MOSS and payment mechanisms to intra-EU and online sales for tangible goods.

Simplification measures for smaller businesses will be introduced, including an appropriate threshold which can address problems without causing effect to the single market or compliance challenges for tax administrations.

Andrus Ansip, European Commission vice president for the Digital Single Market, said:

“We promised to support companies, and especially smaller ones, to reduce burdens arising from different VAT regimes. Today we ask businesses and other stakeholders to help find the most effective and meaningful ways of delivering on this promise. In the Digital Single Market Strategy we have already put forward some measures we would like to take, such as a VAT threshold for startups.”

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said:

“This consultation presents a real opportunity to ensure that future VAT revenues from the digital economy are distributed fairly and effectively. At the same time, we want to make it as easy as possible to comply with the rules. We also have an interest in ensuring that future legislation reflects the reality for businesses across the EU.”

Contact us today to talk about VAT MOSS.