The world of VAT has been in constant change since the start and there is no sign of status quo anytime soon. The main driver of the development nowadays is international harmonisation efforts, with fraud prevention as one of the main objectives. But an ambition is also to make it easier for companies to do business across borders.
The harmonisations applies to regulations, but also to some extent of tax levels, and the European Union is a global front runner in this development.
A recent example of VAT harmonisation is for companies in the consumer-facing telecom and broadcasting industries is the optional program called MOSS, Mini-One-Stop-Shop.
MOSS allows businesses to tax register in one EU country, which becomes responsible for VAT distribution to other countries within the union. The European commission has proposed to extend MOSS to include other areas, such as e-commerce. Full implementation is scheduled for 2021.
In addition, the commission has also proposed a legislation called OSS which is intended to replace the current practise of reversed charge for goods in B2B transactions between EU countries. The current plan is to implement this by 2022.
Harmonisation is undoubtedly a step in the right direction. Transparency and ease makes it easier to do business, and should contribute to healthier companies, which in turn contributes to economic growth in the EU.
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