VAT: Commission welcomes agreement on simpler and more efficient rules for businesses that sell goods online

The Commission welcomes today’s agreement on a series of measures to improve how VAT works for online companies in the EU. The new system will make it easier for consumers and businesses, in particular start-ups and SMEs, to buy and sell goods cross-border online. It will also help Member States to recoup the current estimated €5 billion of VAT lost on online sales every year. The agreement was reached by the Economic and Finance Ministers of EU Member States during their meeting in Brussels, only a year after the Commission made its ambitious proposals. Following the agreement, Andrus Ansip, Vice-President for the Digital Single Market,said: “This is a new step to boost e-commerce in Europe, a few days after reaching an agreement to end unjustified geo-blocking for consumers shopping online. Companies selling abroad online will deal with VAT in the same way as they do for sales in their own countries. This will also make public services more efficient and increase cooperation across borders.” Following the agreement, Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “Brick by brick and piece by piece, a new VAT system is being built that is fit for purpose and within which internet companies operating across borders can thrive. At the same time, we are making sure that non-EU businesses do not get preferential treatment when selling to EU consumers – both directly and through online marketplaces. Today’s agreement also bodes well for the more fundamental VAT reform in the EU that is so urgently needed.” For more information please consult the press release and MEMO.