The EU Commissioner for Taxation has welcomed the European Parliament’s strong support, expressed on February 26, 2014, for a Standard VAT Return. The Standard VAT Return is one of the Commission’s key proposals to reduce the burden of compliance for business. The standard return would replace national VAT returns, requiring businesses to provide the same basic information with the same deadlines regardless of their location within the European Union.
The Standard VAT Return is to have only five compulsory boxes for taxpayers to fill in. Member states would be allowed to request a number of additional standardized elements, up to a maximum of 26 information boxes. This is a great improvement on the current situation, whereby some member states require up to 100 information boxes to be completed. Every year, 150 million VAT returns are submitted by EU taxpayers to national tax administrations.
Under the new regime, businesses will file the Standard VAT Return on a monthly basis, while micro-enterprises will only be obliged to file quarterly. The obligation to submit a recapitulative yearly VAT return, which some member states currently demand, would be abolished. The proposal also encourages electronic filing, as the Standard VAT Return will be allowed to be submitted electronically throughout the European Union.
The proposal for a Standard VAT Return across the European Union is part of the European Commission’s work to create a more efficient and fraud-proof VAT system, as set out in its December 2011 Communication on the future of VAT.