VAT must be collected where the consumer is

"Value added tax must be collected where the consumer is, not where the merchant is. A new VAT system must be based on such a destination principle", said Burkhard Balz MEP today, EPP Group Spokesman on tax affairs.

"Cross-border business between companies inside Europe should not be VAT free as it is now, but must be treated as domestic business. The tax rate of the Member State of the customer should be applied", Balz added.

The new VAT system must be simpler and not fraud-prone. Burkhard Balz MEP

The EPP Group welcomes the overhaul of the European VAT system the European Commission announced today, but regrets that the Commission did not present a fully-blown legislative proposal. "The plan and the quick fixes proposed today are good, but we have now been waiting for 24 years for a definitive system on how VAT is collected. The Commission said in 2016 that we will have a new law in 2017, but it is just another announcement", said Balz.

"The VAT exemption for cross-border business has, so far, been the main source of the widespread VAT fraud. Because of this, we lose 50 billion Euro every year. The new VAT system must be simpler and not fraud-prone", Balz stressed.