VAT: EPP Group wants to reform 'prone to fraud' system

Parliament adopts 'action plan': VAT should be paid where the consumer is

"A clear call to EU Member States to fight VAT fraud resolutely and jointly", stated Werner Langen MEP, the EPP Group MEP who drafted the Report 'Towards a definitive VAT system' adopted today by the European Parliament.

"In the light of the problems of VAT fraud and avoidance, the current system is unsustainable", Langen said.

Closing the gap of around €160 billion, tax shortfall is one of the most urgent challenges of the European tax system. "VAT is a consumption tax which has to be paid by the final consumer. VAT must be collected where the consumer is, not where the merchant is", said Langen. His Report also calls for a better exchange of information between tax authorities of the Member States to avoid fraud and for a simplification of the current system.

We need to end the 23 years of the preliminary solution. Werner Langen MEP

"We want to simplify cross-border trade for small and medium-sized companies. This means we also need a reliable framework for those sectors, goods and services which can benefit from reduced VAT rates. That framework should remain flexible enough to take national specificity into account", Langen explained.

"We need to end the 23 years of the preliminary solution. The VAT system we have now was never meant to be permanent. Now the Commission and Member States are on the ball. Only reform can bring justice to the VAT system", concluded the German MEP.