Implementation of a value added tax (VAT) action plan in the European Union is set to start in January 2019. There are some considerations for companies before implementation starts in January 2019.
The VAT action plan aims at replacing the transitional regime of intra-community supplies introduced in 1992, and includes a series of measures to eliminate the VAT obstacles concerning cross-border e-commerce as part of the digital single market strategy.
A definitive VAT system is intended to assist companies to attain the benefits of the single market and compete on a global stage. The reforms are set to cut the “VAT gap” by an estimated 80%, and are expected to save businesses approximately €1 billion in administrative costs currently associated with cross-border trade in the EU. The European Commission today released a report about the effects of the VAT gap and a list of “frequently asked questions” (FAQs) about the VAT gap.
Read a September 2018 report prepared by the KPMG member firm in Switzerland
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