The European Commission issued a Communication on 6 December outlining the characteristics of the new value-added tax (VAT) regime and priority actions needed to create a simpler, and more efficient VAT system in the EU. Will Morris, Chair of AmCham EU’s Tax Task Force stated that, ‘We believe the Communication is a step in the right direction. We need a VAT system that is workable for business, especially when it comes to cross-border trade’.

With that in mind, AmCham EU urges the EU Commission to adopt a VAT system which benefits the internal market and reduces the burden on taxpayers. Such a system should include:

• a neutral destination-based principle for cross-border supplies of goods;
• instruments to make access to information easier;
• a review of the scope of VAT exemptions (especially in cases where policymakers are looking to impose new forms of indirect taxations on certain VAT-exempted businesses); and
• measures to protect bona fide taxpayers.

Furthermore, AmCham EU recommends measures to increase legal certainty and transparency in the legislative process. AmCham EU is ready to participate in the increased governance of VAT at EU level, in particular in the tripartite EU VAT forum. AmCham EU considers the elements described above even more critical to the VAT system than a focus on collection mechanisms or harmonisation of rates.

AmCham EU believes this is a unique opportunity to develop a truly neutral VAT system for business. Providing greater legal certainty in the VAT system will lead to the better functioning of the single market and will increase its attractiveness to global businesses.