EU proposes overhaul of VAT System

Posted on: 11/12/2017

European Commission has introduced draft legislation to propose a change from the current VAT exemption on EU supplies based on the customers’ VAT registration to a system requiring VAT accounting in the place of destination.  This would mean the end of the UK EC Sales List and acquisition VAT accounting.  The new system will mean an EU supply of goods will be taxable in the country of arrival known as “intra-union supply”, eg goods supplied from the UK to Belgium will be taxed in Belgium at the Belgium rate of VAT.  The VAT will be accounted for by the customer (if they are a “certified taxable person”) or paid by the supplier.  This may mean business to consumer suppliers will have to be VAT registered in their customers’ countries though there will be a system for non-registered suppliers.  The Commission is also proposing other changes in the way VAT is dealt with in the EU.

Technical rules to be provided during 2018

Changes effective 2019

 

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