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Simpler EU VAT Invoicing Rules To Enter Into Force

by Ulrika Lomas, Tax-News.com, Brussels

21 December 2012


New European Union (EU) value-added tax (VAT) rules are set to enter into force from January, rules the European Commission says will make life simpler for businesses.

The rules are contained in a Directive on VAT invoicing adopted in July, 2010, and must be applied in all member states from January 1, 2013. The Directive aims to simplify VAT invoicing regimes, in order to reduce burdens and barriers for businesses.

Under the changes, electronic invoicing will have to be treated in the same manner as paper invoicing. The Commission says this will enable companies to choose the VAT invoicing solution that works best for them. It is hoped that this could save businesses up to EUR18bn (USD23.7bn) a year in reduced administration costs.

The other headline reform is to allow EU member states to offer a cash accounting option to small businesses with a turnover less than EUR2m a year. Such companies will not have to pay VAT until it has been received by the customer. The intention is to avoid cash-flow problems for small- and medium-sized enterprises (SMEs).

Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, commented: "These new VAT rules reflect what businesses in Europe need today: simpler procedures, reduced costs and support in applying solutions that best meet their needs."

TAGS: compliance | tax | small business | business | European Commission | value added tax (VAT) | tax compliance | accounting | small and medium-sized enterprises (SME) | European Union (EU) | Europe

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