Written by Cécile Remeur (3rd edition, updated on 20.6.2019),

post-it acronym : VAT
© Jérôme Rommé / Fotolia

The common European value added tax (VAT) system was set up in 1967, and reformed in 1993, to adapt it to the entry into force of the European Union (EU) internal market. The existing rules governing intra‑Community trade were therefore intended to be transitory. While VAT has become an important source of revenue for both national governments and the EU budget, the current system is ill-adapted to the challenges of a modern economy.

A substantial review was initiated as from 2016, to update the EU VAT system and make it less vulnerable to fraud,
as described in the April 2016 VAT action plan. The proposal, adopted on 25 May 2018, would amend the VAT Directive (Directive 2006/112/EC), to introduce detailed technical measures for the definitive VAT system for intra-EU business to business (B2B) trade in goods. The present proposal follows and complements the adoption of Council Directive (EU) 2018/1910 on 4 December 2018. The Parliament adopted its position on the proposal on 12 February 2019; the Council has yet to finalise its position.

Versions

Proposal for a Council directive amending Directive 2006/112/EC as regards the introduction of the detailed technical measures for the operation of the definitive VAT system for the taxation of trade between Member States
Committee responsible: Economic and Monetary Affairs (ECON) COM(2018) 329
25.5.2018
Rapporteur: Fulvio Martusciello (EPP, Italy) 2018/0164 (CNS)
Shadow rapporteurs: Jeppe Kofod (S&D, Denmark)
Roberts Zīle (ECR, Latvia)
Thierry Cornillet (ALDE, France)
Matt Carthy (GUE/NGL, Ireland)
Molly Scott Cato (Greens/EFA, United Kingdom)
Barbara Kappel (ENF, Austria)		 Consultation procedure (CNS) – Parliament adopts a non-binding opinion
Next steps expected: Adoption by the Council

timeline 7 steps - adoption by council