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VAT should be paid where the consumer is


11 Oct 2016


Euro & Finance

The EPP Group in the European Parliament has called for major changes in the European Union's value-added tax systems. "VAT is a consumption tax which has to be paid by the final consumer. VAT must be collected where the consumer is, not where the merchant is", said Werner Langen MEP, Parliament's Rapporteur of the Report 'Towards a definitive VAT system and fighting VAT fraud' ahead of today's vote in the Committee on Economic and Monetary Affairs.

Langen also called for more pilot projects to gain experience with the so-called reverse charge procedure when collecting VAT. "The reverse charge procedure is an efficient possibility to curtail VAT fraud. Collecting VAT among companies is complicated, expensive and prone to trickery. The reverse charge procedure already stood the test in some business sectors that are prone to fraud. The reverse charge procedure could reduce both fraud and bureaucracy", Langen said.

The reverse charge procedure could reduce both fraud and bureaucracy.

Werner Langen MEP

The EPP Group wants to move to a definitive VAT system. "The current system has been provisional for already more than 20 years. Part of a definitive common VAT system is also a common EU list of goods and services which can profit from reduced VAT", Langen stressed.

Parliament's Committee on Economic and Monetary Affairs votes today around 17.00 hrs on the Report. The Parliament's plenary will debate and vote on the Report at the end of November.