Brussels wants to stop the VAT black hole, which it estimates that collection fraud caused a loss of 93,000 million euros in revenue in EU countries in 2020. In 2017, this figure reached 137,000 million. The European Commission proposed a series. For system improvement measures and leakage prevention. The intention is to move towards a sort of ‘one stop shop’ for managing this tax at the community level, as well as leveraging digital platforms related to passenger transport and holiday rentals to take responsibility for the collection that is often evaded.
The European Commission’s claim is that platforms such as Airbnb or Uber have to pay VAT when the primary service providers do not. In a press release, the institution admits that sometimes they are small companies that do not need to be registered in the tax system or individuals. If they don’t pay the tax, it will be up to those mediators, who now have to have the council’s approval, so it’s not final, according to the commission’s proposal.
Community enforcement is committed to a real-time VAT system based on electronic invoices for cross-border trade. “We have calculated that the transition to an electronic invoicing system will help member states to contribute an additional €11,000 million over ten years,” explained Economy Commissioner Paolo Gentiloni. Added to this is the saving in administrative costs, which amounts to 4100 million per year.
The third measure is aimed at a ‘single window’ for VAT management, so that those who sell in more than one EU member state do not have to register everyone who wants to operate. Thus, cross-border traders will have a single VAT management register. This administrative savings is estimated at 8,700 million.
Spain, well stopped in collecting VAT
“EU countries lose billions every year to VAT fraud, while companies struggle to comply with outdated VAT rules,” Gentiloni said of the VAT collection system, which has been in place for 30 years. entered into force. “Today’s proposal will usher in a new era in the VAT system, benefiting businesses, especially SMEs, as well as Member States at a time when public finances are under pressure and the need to fund investment and public services is great.” At the same time, we are introducing a higher level between traditional providers and digital platforms in sectors that suffer more from unequal tax treatment,” the Commissioner noted.
According to the estimates prepared by the European Union, Spain is one of the best countries with fraud in terms of VAT collection, with a deviation of 4.7%, compared to Romania, which lost 35.7%, Malta (24.1%). and Italy (20.8%). This figure represents a revenue loss of 3,396 million euros for the public treasury. Thus, Spain collected 69,382 million VAT, but 72,778 million euros should have been collected.
Source: El Diario