A key provision contained in the proposal would provide for a “one-stop-shop” system whereby a trader could fulfil all his VAT obligations for EU-wide activities in the Member State in which he is established.

This would allow traders to use a single VAT number for all supplies made throughout the EU, and to make VAT declarations to a single electronic portal that would then be submitted automatically to the different Member States to which the trader supplies goods or services.

The proposal also contains five other simplification measures which take into account opinions expressed during a public consultation held earlier this year.

"The European Council has identified the reduction of the administrative burden on business as an important element for fostering economic growth" explained Internal Market Commissioner, Frits Bolkestein, adding that: "This proposal is a valuable contribution towards that objective".

This follows the publication last month of a new regulation to designed to ensure more uniform application of European Union VAT rules in a bid to provide more transparency and legal certainty to both traders and national tax administrators.

According to the EC, the proposed regulation (which is not binding on national tax administrations) seeks to ensure consistent interpretation of VAT law in a number of areas, including: the place of supply, and therefore taxation, of various types of services; definition of specific goods and services which should be exempt from VAT; calculation of the amount that should be considered the ‘taxable amount’ for VAT purposes; the definition of electronically supplied services; and the accounting details for the special simplified arrangements for the application of VAT by non-EU suppliers of electronic services.