the future of vat in the eu discussion of the eu commission green paper ….2011 john chandler...
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The Future of VAT in the EUDiscussion of the EU Commission Green Paper ….2011
John ChandlerProduct Management – M3 Financials
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GAM3 ….at CUE2011….with Country Badges..!!
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The European Commission Green Paper..on the future of VAT
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A simpler, more robust & efficient VAT system…
The Green Paper [SEC(2010) 1455 final]
– On the future of Value Added Tax
The objective of the Green Paper is to launch a broad based consultation process with stakeholders on the functioning of the current VAT system and how it should (could) be reframed in the future
The scope of this review includes:
– VAT Reporting
– EU Sales Reporting
– Intrastat Reporting
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Standardised VAT Reporting across EU….
One Common EU VAT Report….across all 27 Member States
– Same Lines and Boxes
– Common definition of line and column content
– Same detail and summary reporting requirements
– Same indicator rules for EU Sales
One common VAT Audit File….to be used by all country audit bodies
– Common definitions and file content
– SAF-T is NOT currently a simple specification and should be revised
IF VRNO is stored do we need Name and Address too….?
Why do some countries have an Annual VAT Report…?
– The monthly/quarterly returns should be adequate…?
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Common VAT Rates and Rules across EU
Goods and Services to be classified under standard rules
– Exemptions rules to be common
– High; Low and Standard Rates to be common classification
– Same items same VAT treatment
Simplification of Reporting Rules….from today’s position
– There are too many rules
– The rules are too complex for most businesses
– The rules are too complex for most VAT auditors
Reduce the number of VAT Exemptions
– In every Member State…..
Standardise the handling of VAT and Cash Discount
– GB; BE and SE have one approach
– DE and AT take another
– NL is different again
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Documentation …for VAT Purposes
Standardise the Invoice Layout to meet VAT Rules in EU
– Today we have 14 basic rules…but…..
– Each country adds its own specific rules/requirements
Clarify Corrective Invoicing rules and standardise across EU
– Some countries have a requirement …some don’t
Clarify what documents need to be retained for VAT Purposes
– Standardise rules for using scanned images instead of paper
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Inter and Intra Division Trading
Introduce one EU VAT Registration Number for these Businesses
Apply VAT Group Logic across Europé
In the end this will remove the need for Fiscal Representation
– The VRNO can be used across EU Member States
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Collect and audit VAT centrally ..at EU Level
Political of course….
BUT….
Probably the most efficient way to create standardisation
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Response for France….as an example…..
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PwC….destination or origin based approach
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PwC….Intra Group Trading…..exempt from VAT rules
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PwC….
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PwC…Standardisation or Commonisation…..
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The EU Commission Green Paper….
Links….
http://ec.europa.eu/taxation_customs/common/consultations/tax/2010_11_future_vat_en.htm
EU_Green Paper on VAT
PwC VAT Study Summary_en.pdf
OECD_SAF-T Version2 Specification April 2010.pdf
OECD_SAF-T Schema_Version2 April 2010.pdf
M3 10.1 - Standard Audit File SAF-T v3.00.pdf
Comments to be sent in by the end of May 2011
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