Renew Europe delivers modernised VAT rules to curb fraud and make compliance more flexible for SMEs

The Renew Europe Group played a pivotal role in shaping the VAT rules package endorsed by plenary today. The adopted legislation will modernise VAT rules for the digital age, making them fairer and simpler for business, especially for SMEs, while improving collection, reducing compliance costs and cutting fraud in the VAT Gap.

MEP Olivier Chastel (Mouvement Réformateur, Belgium), rapporteur on the VAT digital age package, stated:

“Adapting VAT to the digital age is necessary, but we also need to give businesses and tax authorities greater flexibility to comply with these new requirements. Only this way we can improve the functioning of the internal market and better combat VAT fraud, which in recent years has meant loss of 93 billion € for EU countries budgets.”

The endorsed text enhances and expands the single VAT registration through the VAT One Stop Shop, with greater flexibility for administration and businesses on reporting obligations to avoid potential penalties, while introducing real-time digital reporting for VAT purposes. The entry into force of e-invoicing and platform economics is also postponed to give companies and tax authorities more time to adapt.

Finally, the package contains provisions to improve cooperation with European bodies such as OLAF and Europol to prosecute VAT fraud in Europe, as well as to protect whistle blowers and business secrecy.