Steps towards a definitive VAT system

26-09-2018

Harmonisation of domestic provisions on value added tax – VAT – dates back to 1967 because of the potential distorting effect of this consumption tax on the single market. The transitional VAT arrangements, departing from the destination-based principle, have applied in the single market for more than two decades. Since 2016, the VAT framework is being reviewed and updated, moving to a destination-based framework that also includes a revision of the VAT rate provisions. Parliament is due to vote on two Commission proposals on VAT during its October I plenary session.

Harmonisation of domestic provisions on value added tax – VAT – dates back to 1967 because of the potential distorting effect of this consumption tax on the single market. The transitional VAT arrangements, departing from the destination-based principle, have applied in the single market for more than two decades. Since 2016, the VAT framework is being reviewed and updated, moving to a destination-based framework that also includes a revision of the VAT rate provisions. Parliament is due to vote on two Commission proposals on VAT during its October I plenary session.