The Council adopted conclusions on: – the Commission's VAT action plan, "Towards a single EU VAT area"; – a special report by the Court of Auditors, "Tackling intra-Community VAT fraud: more action needed".
The Council highlighted the importance of administrative cooperation for preventing VAT fraud, in particular the automatic exchange of information. It welcomed plans to reduce VAT compliance burdens for businesses, particularly for SMEs, and emphasised the need to simplify cross-border e-commerce. The conclusions welcome the Commission's intention to propose increased flexibility on VAT rates, whilst noting the need for the VAT system to maintain a sufficient level of harmonisation.
The Commission sees an urgent need to update VAT rules, and the action plan sets out its ideas for making them simpler, more fraud-proof and more business-friendly. Cross-border VAT fraud is estimated to amount to around €50 billion a year, whilst the VAT system remains fragmented and creates significant administrative burdens, especially for SMEs and online companies.
The Court of Auditors' report finds fraud prevention to be hampered by a lack of comparable data and indicators. It contains a series of recommendations to the Commission, the Council and the European Parliament.
The conclusions were adopted at a meeting of the Economic and Financial Council.