EU 2021 VAT reforms – Finland concerns

Thu 23rd Nov 2017

Finland has joined Germany in raising concerns about the European Commission’s proposal to create a single VAT area.

The reforms include shifting to a destination-based VAT regime for cross-border sales whereby VAT is charged in the country of the consumer rather than the vendor.  The EC has proposed vendors charging foreign VAT, but reporting and paying it to its own national tax authorities – who would then forward it to the country of the customer. This is an extension of the 2015 Mini One-Stop-Shop reforms on B2C digital services.

Germany delays EU e-commerce VAT reform

Germany has already stalled the reforms this month’s monthly meeting of EU finance ministers (ECOFIN) because of concerns around ceding its tax collection rights to fellow member states.

Whilst Finland support the overall objectives of the reforms – including targeting €50billion in EU VAT fraud and simplifying the EU VAT compliance burden – it has questioned the administrative costs for B2B transactions, and open questions around the proposed model.

 

ECOFIN will discuss again the proposals in early December.



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