The Malta-EU Steering and Action Committee (MEUSAC) and the VAT Department organised a consultation session on the ‘Commission Communication on an Action Plan on VAT’. The session was held on Wednesday, May 18, 2016 at Europe House in Valletta.
The European Commission plans to present a legislative proposal to put in place a definitive VAT system based on the principle of taxation in the country of destination of the goods. This means that the taxation rules according to which the supplier of goods collects VAT from customers will be extended to cross-border transactions. This change alone should help reduce cross-border VAT fraud by €40 billion per year.
The Commission will in parallel take forward a number of other linked initiatives to help resolve the challenges presented by the VAT system. The current system is also struggling to address innovative business models and technological progress in today’s digital environment. Different VAT rates between physical and digital goods and services do not fully reflect today's realities. Moreover Member States feel unduly constrained in their rates-setting policy.