CJEU - Recent Developments in Value Added Tax 2016

1. S. 130Introduction

For several years the European Commission has attempted to modernize the VAT system and to reduce compliance costs for businesses and the amount of VAT fraud. In 2011, with the submission of the Green Paper 2 and the Communication on the future of VAT, the Commission emphasized the need to strengthen the capacity of the Member States to improve VAT administration and reduce the VAT gap.

The Action Plan adopted by the Commission on 4 July 2016: Towards a single VAT area - Time to decide -sets out a pathway to the creation of a single EU VAT area, notably proposing to enhance the trust between business and tax administrations and between EU tax administrations. Improving “voluntary compliance” is certainly a element in this strategy. It is obvious that the taxpayer must fulfil his tax obligations, it is equally clear that tax administrations should provide legal certainty.

The Community VAT legislation is an important basis for the functioning of the internal market. It also has some “congenital” weaknesses. The rule requiring unanimity for its adoption is an important obstacle, indeed the legislation adopted is mainly the result of a compromise where often inaccuracies ...