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Significant Progress in VAT Compliance Achieved in 2022, but Challenges Remain

A new report published on 18 December 2024 by the European Commission highlights substantial improvements in value added tax (VAT) collection in most EU Member States between 2018 and 2022.

The annual EU VAT Gap Report, which assesses the difference between expected VAT revenues and actual collections, shows that Member States lost approximately €89 billion in VAT in 2022, compared to €121 billion in 2018. These losses are primarily attributed to VAT fraud, evasion, avoidance, non-fraudulent bankruptcies, calculation errors, and other factors.

Reducing the VAT compliance gap is a positive development, as lost revenues undermine governments’ ability to fund essential services such as education, healthcare, and infrastructure. Read more

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New VAT Regime for Small Enterprises: Key Changes Starting January 2025

From January 1, 2025, small enterprises will be able to take advantage of a special VAT regime (SME scheme) designed to:

  • Exempt their sales from VAT, allowing goods and services to be sold without charging VAT.
  • Simplify VAT compliance, reducing administrative burdens.

However, businesses opting for VAT exemption will forfeit the right to deduct VAT on expenses related to their exempt sales. Read more

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VAT: Enhanced EU-Norway Cooperation to Tackle Fraud and Improve Recovery of Claims

On October 2, the EU and Norway signed an agreement to update their existing framework for administrative cooperation in VAT matters, focusing on fraud prevention and claim recovery. This revised agreement introduces new tools to strengthen their collaboration.

The original EU-Norway agreement, which came into effect on September 1, 2018, was the first international treaty focused on VAT cooperation. After six years, the partners have amended it to align with Council Regulation 904/2010 on VAT fraud prevention and Council Directive 2010/24/EU on mutual assistance for the recovery of tax-related claims. Read more

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VAT in the digital world

The European Commission has proposed to renew and improve the EU’s VAT system to help businesses and combat digital fraud. The proposal was motivated by the loss of 93 billion euros in VAT revenue by Member States in 2020 and the growing importance of the platform economy. Read more

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Reverse charge of vat on imports to France

As of January 1, 2022, the VAT due upon release for consumption in France of goods coming from outside of the European Union, has no longer to be paid at the time of customs clearance in France and must be reverse-charged in the VAT returns filed with the French tax services. Read more

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Summary VAT statement and answer to statistical surveys, for France

Since January 2022, the methods of declaration of statistical and fiscal information relating to intra-Community supply and acquisition of goods, that were reported in Intrastat – “Déclaration d’Echange des Biens” (“DEB “) change. This reform follows the entry into force of a new regulation on European business statistics, known as the EBS, European Business Statistics (regulation (EU) 2019/2152 of the European Parliament and of the Council of 27 November 2019). Read more

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Webinar | E-Commerce: new EU VAT rules for B2C distance sales of goods and services will come into force on July 1, 2021

A major VAT reform is coming in effect on July 1, 2021 in the Member States of the European Union. Companies providing certain services or deliveries of goods to private individuals located in the EU Member States, will be able to register at the VAT Mini One Stop Shop (MOSS) in a single EU Member State, where they can declare and pay VAT on all of their sales in EU Member States. Read more

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E-invoices in Poland

The Ministry of Finance announces the introduction of e-invoices.

The Ministry of Finance has published a draft amendment to the VAT Act, which announces the introduction of e-invoices, i.e. a standardized form of a document which will be transparent and legible for all users. The new solution will not be obligatory from the beginning however the taxpayer choosing e-invoices will receive a VAT refund faster. Read more

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Principle of continuity for unfinished operations between the eu and the uk at the end of 2020

Continuity principle for unfinished operations between eu and uk (at the end of 2020)

The transitional period, which began on February 1, 2020, which extended the tax effects of Brexit to January 1, 2021, ended on December 31, 2020.

According to the provisions of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union, the United Kingdom will no longer be part of the Unique Market and the Customs Union of the EU and will become, in effect, for the purposes of VAT, a “third country”. Read more