08 April 2022

COMMISSION RECOMMENDATIONS TO IMPROVE NATIONAL VAT SYSTEMS

On 7 April, the European Commission published its Screening and Diagnostic Report of VAT Administration in the EU containing a series of recommendations to help Member States improve their VAT revenue collection, control procedures and processes.

By providing a snapshot of current VAT practices in EU countries, the report highlights experiences and best practices in dealing with administrative issues. The report highlights strategies that tax administrations could adopt in their internal organisation and interaction with taxpayers that would improve processes for both tax authorities and businesses. Tax administrations need to step up efforts in areas such as risk analysis, process automation and exchange of information. They need to upgrade their IT systems, increase the number of IT staff and their training, explore the use of several data sets and third-party data, and invest in in-depth data analysis.

The Commission calls on EU Member States to take up current recommendations, not only to help generate the tax revenue needed to respond to the major challenges of the current crisis, but also to level the playing field in the internal market and pave the way towards a faster and more durable post-pandemic recovery.

The Commission submits every three years a report to the Parliament and the Council on the procedures applied by Member States for registering taxable persons and determining and collecting VAT, as well as on their VAT control systems, as requested by Article 12 of Council Regulation 1553/89.

The full report is available here.

Source: European Commission