The Organization for Economic Cooperation and Development (OECD) has proposed changes that would assist taxpayers in complying with the value added tax (VAT) rules. The compliance burden for taxpayers could be reduced by establishing a clear registration threshold of EUR 10,000. Any business with a turnover below this level could register for VAT on a voluntary basis but otherwise would not need to administer VAT. The OECD also recommends the removal of inactive taxpayers form the VAT register, so that businesses that are not active do not need to continue to comply with the administrative requirements. This would also save time for the tax administration. Also, the VAT return itself could be simplified to cut the preparation time and VAT refunds could be given through a deduction of tax due on returns rather than by separate application. The OECD also suggested that there is no need for businesses to submit an annual VAT return.
