MaltaTaxStandard VAT return across the EU proposed

After three years of deliberation, a proposal to amend Council Directive 2006/112/EC has been put together, with the intention of creating an EU-wide standard VAT return which Member States are required to enact in domestic legislation by the 31^st December 2016. With the goal of easing the bureaucratic and procedural requirements imposed on businesses in different EU countries to declare the VAT they owe, the Commission considered several options in order to reduce the procedural burdens and tackle the lack of EU-wide harmonisation.

The selected option was to introduce a compulsory standard VAT declaration with limited flexibility for Member States to determine the information from a standardised list. This option was prioritised over others given its implications in maximising burden reduction for EU businesses whilst limiting their costs, facilitating control of VAT returns by the Member States, and generally harmonising the 28 different national systems with a simple and uniform EU approach. The proposal would require a standard VAT return to have a limited set of mandatory information while allowing Member States to require further information from taxable persons, with notifications to the VAT committee for the sake of transparency and to facilitate business compliance.

The proposal will also require a standard cross-EU monthly VAT period for all businesses (excluding micro enterprises with turnovers of under €2 million), which are to submit VAT returns on a quarterly basis. Member States would however still be given the option to extend this VAT period up to one year, to further reduce the administrative burden. The proposal also introduces a common minimum deadline for submitting the standard VAT return which would be set at the end of the month following the tax period.

Further to the above, the requirement for annual summarising VAT returns is to be eliminated and common rules for the correction of VAT returns are also to be introduced (however the correction period will be left up to the individual member states).