On Monday 18 November the 7th Brussels Tax Forum will gather 250 participants from 37 countries to discuss the EU VAT system, and how to improve its efficiency. Among the topics to be discussed are the fight against VAT fraud, improving VAT compliance and the role of VAT in fiscal consolidation.
The first session at the Forum will focus on how to better fight against VAT fraud. VAT fraud not only leads to considerable revenue losses, but also creates competitive distortions and extra tax burden for honest tax payers. Important new legislation to prevent carrousel fraud has been adopted this year. However, participants will be asked to consider other measures that could reduce this problem further. Discussions are scheduled on innovative ways to improve the fight against fraud such as joint actions between businesses and tax administrations, both domestically and across borders.
The second session will examine how improving the design of VAT can contribute to fiscal consolidation. VAT represents 20% of all taxes collected in the EU, and therefore plays a significant role in the quality of Member States' revenues. Improving the efficiency of VAT could help Member States better meet their fiscal needs without the need for further tax rises. Discussions will include a look at the concrete example of Portugal, and also consider the question of how effective reduced VAT rates actually are.
The third session of the Forum will focus on facilitating compliance and reducing burdens for businesses. Improving the VAT system can substantially reduce the administrative burden for businesses, as pointed out in the recent Commission Communication on Regulatory Fitness. Recent positive initiatives have been the new invoicing rules, which entered into force in January 2013, and the proposal for a standard VAT declaration. A simpler VAT system is simpler to comply with, and can therefore have a positive impact on VAT receipts too, as more taxpayers pay what they owe.