European Commission presents new VAT rules for digital single market

The European Commission has introduced a series of measures to improve the VAT system for e-commerce businesses in the EU.

The proposals will allow consumers and companies to buy and sell goods and services more easily online.By introducing an EUwide portal for online VAT payments (the ‘one stop shop’) VAT compliance expenses will be significantly reduced saving businesses across the EU €2.3bn a year. The new rules will also ensure that VAT is paid in the member state of the final consumer. The purpose of this is to distribute more fairly tax revenues among EU countries and help member states recoup the estimated €5bn VAT lost on online sales every year.

The commission will also allow member states to apply the same VAT rate to e-publications such as e-books and online newspapers as their printed equivalents removing provisions that excluded e-publications from the favourable tax treatment allowed...