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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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Union Customs Code Annual Progress Report 2023 Released

On September 9, 2024, the European Commission adopted the Union Customs Code (UCC) Annual Progress Report 2023. This fifth edition details advancements in implementing the UCC and its 17 key digital projects, drawing on input from EU Member States throughout 2023. The report has been shared with the European Council and Parliament. Read more

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European Commission Proposes New Tax Cooperation Framework (DAC9) to Simplify Filing Obligations under Pillar 2

The European Commission has introduced a proposal to amend the Directive on Administrative Cooperation in the field of taxation (Directive 2011/16/EU – DAC). Known as DAC9, this proposal aims to streamline the filing process for companies subject to the Pillar 2 Directive (Directive (EU) 2022/2523), which establishes a global minimum tax level for multinational enterprise groups (MNEs) and large-scale domestic groups (LSDGs) within the EU. Read more

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Record Levels of Counterfeit Seizures in the EU in 2023

Detentions of counterfeit in the EU have reached new heights, with law enforcement authorities detaining 152 million fake articles in 2023, a 77% increase from the previous year. The estimated value of these counterfeit goods, seized at both EU borders and within the internal market, raised to EUR 3.4 billion, a 68% increase on 2022. Read more

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Wise Persons Group on Challenges Facing the Customs Union

Wise Persons Group on Challenges Facing the Customs Union (WPG) was established to generate innovative ideas and concepts that contribute to the ongoing debate about the future of the Customs Union.

The Customs Union, within the European Union (EU), is the largest trading block globally, accounting for over 15% of world trade. In recent years, the Customs Union has faced various challenges, including the rise of e-commerce and increased workload due to the departure of the United Kingdom from the EU Customs Union. Read more

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Import Control System 2 – Release 2

There is new information on how to organize the migration to ICS2 version 2!

Who?

Postal operators, express and airlines and freight forwarders.

When?

The second release will enter into force on 1 March 2023. Read more about the ICS2 Release 2 procedure for entrepreneurs here.
You can also find more information about migrating from ICS2 version 1 to version 2 here. Read more

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Ecofin: Updated EU list of non-cooperative jurisdictions for tax purposes

On February 14, 2023, EU Member States reached an agreement to update the EU list of non-cooperative jurisdictions for tax purposes. The latest update consists of 16 jurisdictions that lack commitment to improving their tax good governance or have made no progress towards their previous commitments, and are therefore included in Annex I of the EU list. These countries include American Samoa, Anguilla, the Bahamas, the British Virgin Islands, Costa Rica, Fiji, Guam, the Marshall Islands, Palau, Panama, Russia, Samoa, Trinidad & Tobago, the Turks and Caicos Islands, the US Virgin Islands, and Vanuatu. Read more