VAT News

EU Action Plan interaction with Brexit – Digital Markets impact areas:


The EU Commission adopted an Action Plan for VAT on 7 April 2016 and we are continuing to see consultation papers emerging to address the four key themes in the plan:

  • On Going Policy initiatives:
    •  removing obstacles to e-commerce in the Single Market
    • SME’s VAT Package
    • Urgent Measure to tackle the VAT gap:
      • Improving cooperation within the EU and with non-EU countries
      • Towards more efficient tax administrations
      • Improving voluntary compliance
      • Tax collection
      • Towards a robust single European VAT area:
        • Definitive VAT regime for cross- border trade
        • Towards a modernised VAT Rates policy:
          • More freedom for Members States on rates policies

At the time of writing, a range of EU proposals are in circulation - one example is the Digital Single Market Package. Some of the proposals will straddle the UK’s effective departure date from the EU Single Market in 2019 - making the assumptions that negotiations do fulfil the UK’s current position for a “Hard Brexit” that is.

Certainly in 2018 there is a proposal to implement new registration thresholds for cross border supplies of electronic services aimed to help micro and small businesses with a threshold of €100k before they are drawn into the MOSS regime.

Beyond that date – and one to consider in terms of how MOSS will interact post Brexit – is the extension of the regime to include online sales of goods and all cross-border services to private consumers.

Other proposals include:

  • The removal of the Distance Selling Regime
  • Removal of the small value import VAT relief
  • A new One Stop Shop for Imports where VAT will be collected at point of sale to EU customers by the sellers
  • Further Import VAT simplification mechanism whereby the VAT is collected from the customers with a monthly declaration by the transporter.

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