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Finland Questions EU VAT Reform Proposals

by Ulrika Lomas, Tax-News.com, Brussels

20 November 2017


The Finnish Government has said that while it supports the broad aims of the European Union's value-added tax reform plans, certain aspects of the proposals are problematic, and may lead to increased costs for traders.

In a statement published on November 16, the Ministry of Finance said that the Government "agrees with the aim to simplify value-added taxation" and considers fraud prevention and reducing administrative costs as priority issues.

However, the statement goes on to say that, "at this point," Finland is not prepared to commit to the proposed reforms "because of the problems and open questions involved."

"The model may in fact lead to an increase in administrative costs for companies and in the tax gap. The Government supports the aim to remove the defects of the current system as soon as possible," the ministry said.

In October 2017, the European Commission released plans for what it has said will be the biggest reform of EU VAT rules in a quarter of a century, to tackle VAT fraud. The plan aims to reduce fraud, estimated to cost member states EUR50bn per year, by EUR40bn.

The Commission proposes to fundamentally change the current VAT system by taxing sales of goods from one EU country to another in the same way as goods are sold within individual member states.

However, according to the Commission, the reforms will reduce compliance costs for businesses, by an estimated EUR1bn (USD1.2bn) overall.

TAGS: compliance | Finance | tax | business | European Commission | value added tax (VAT) | Finland | tax reform | trade | Europe

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