By Anna McLauchlin - 17th May 2004
The European Commission has asked industry players to comment on plans to form a one-stop-shop for VAT numbers in a bid to simplify Europe's complex VAT system.
Under the plans a trader would be able to use a single VAT number for all his supplies made throughout the EU using an electronic system which would then be sent to the member states concerned.
At the moment EU VAT is charged in the place of consumption which means that for distance selling, over the internet for example, a trader has to register and pay VAT in the state in which the consumer is located.
Interested parties have until July 31 to comment on the plans, after which the commission will study the results and possibly propose a law to that effect.
But Stephen Bill, head of the commission's VAT unit told EUpolitix.com there are likely to be obstacles to any formal plans.
Introducing a one-stop shop, he said, could be seen as as the first step towards making VAT applicable in the place where the customer is.
And Germany and Luxembourg, with low VAT rates, have already expressed concern that they would lose their competitive edge if this were the case.
"Low rate countries would lose their competitive tax advantage", Bill said.
"But it is an unfair advantage", he added.
Under current legislative procedures, any member state can veto EU tax proposals.
The consultation paper can be found under the Further Reading link.
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