There are currently 28 EU member states, each running their own VAT Returns. They individually decide on the information required on those returns and the supporting documentation needed. In an attempt to standardise data collection across Europe, the European Commission have presented a draft Directive for a standard EU VAT return. It is hoped that a standardised VAT Return will help reduce the amount of VAT incorrectly declared or under declared, and decrease the VAT gap.
On Friday 20 June 2014 the members reached agreement on the proposed implementation of a standard EU VAT return for all 28 member states with the hope that this may be implemented by January 2017.
Companies who trade across Europe currently experience compliance difficulties dealing with the vast differences in data required. Currently, the Irish VAT return requires the least amount of information with the completion of only six boxes, whilst the Italian VAT return tops the list, with in excess of 500 boxes to complete.
It is proposed that the VAT return will include five compulsory information boxes, with 26 additional boxes for member states to choose from. For business with a turnover above €2billion, returns would need to be submitted months, and quarterly for those below €2billion.
VAT changes in the EU to standardise procedures often take years to implement so we’ll have to see whether the January 2017 “deadline” is met. We will keep you informed how this progresses.
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