EU COMPARISON OF VAT

VAT is one of the newest tools of the global economy and is widely adopted in most of the countries. For EU Member States is required not only the existence of VAT, but also that its main characteristics to be uniformly implemented. This should facilitate intra-Community transactions, but in practice does not as there are many local variations which can lead to costly errors and penalties. The objective of this paper is to collate data about the main characteristics of VAT in EU Member States and to highlight the key differences between them. This survey shows that there continue to be opportunities and risks for businesses trading cross border, as a result of differences in application of Community legislation on VAT. This led to the necessity of VAT reform. On this basis, the Commission adopted on the end of the last year a Communication on the future of VAT. This sets out the fundamental characteristics that must underlie the new VAT regime, and priority actions needed to create a simpler, more efficient and more robust VAT system in the EU.