Pre-Accession Countries Struggling With EU VAT Laws

by Ulrika Lomas, for LawAndTax-News.com, Brussels

24 March 2004

Reports in the international media this week have revealed that several of the countries set to accede to the European Union on May 1 are struggling to cope with the implementation of EU VAT laws.

According to the LMG news service, five of the ten pre-accession states have yet to publish final versions of domestic VAT laws bringing them into compliance with the EU's Sixth VAT Directive.

This lack of preparedness has created chaos for companies in those countries, who are trying to put new internal tax and accounting systems in place, and to study the potential tax implications of cross-border transactions under the new regime.

Speaking to LMG, Juraj Ontko, an Ernst & Young tax specialist in Slovakia, stressed the need for companies to be prepared for EU accession.

"It is already causing problems because businesses do not know what will be in the law and they should have started preparations for this. There will be new invoicing procedures and new taxable supplies of goods and services and many other rules which businesses will struggle with if they don't have their systems set up by May 1," he explained.

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