#EUVAT - Main contents
Some small and micro companies are worried about what the VAT changes coming on January 1 mean for them. Here are some thoughts.
The change in VAT rules was decided democratically, and after years of discussion, by EU Member States in 2008. That is six years ago. It was decided that it should be enforced in 2015, giving plenty of time for all to adjust.
As I understand it, one of the aims was to establish a level-playing field for smaller companies. No more picking of low VAT countries by larger companies to gain a competitive advantage over SMEs. Of course, the new rules also aim at fairer revenue distribution between Member States.
Now, some small and micro companies are worried about what the VAT changes coming on January 1 mean for them. Given that this change was adopted six years ago, Member States should have helped businesses to prepare. But even if the concerns come late, they should be listened to. Companies should not be left alone.
One practical aid should be the one-stop-shops that have been put in place.
Our taxation colleagues have explained that businesses selling digital services to customers in more than one EU country will be able to declare and pay all their VAT in their own Member State.
Instead of having to deal with up to 28 different tax regimes, they will just have to make a declaration to their own tax authorities - in the language they know, and with the system they know.
The tax authorities will then be responsible for coordinating the redistribution of the VAT revenues to the Member States to which they are due.
I hear also other concrete concerns such as missing country information for customers in payment systems. I trust that this can be addressed with the companies involved.
Small innovative online companies matter to me. I want you to have the necessary space to grow into successful businesses and to trade across borders. But I also see the merits in the upcoming VAT change. Support for e-commerce will be at the heart of our strategy for the #DigitalSingleMarket that is planned next spring.
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