Intended changes to the VAT Directive on cross-border supplies

Based on the VAT Action Plan, new methods of taxation on supplies of goods between member states should be introduced in the future (probably effective from 2022). The goal is to prevent tax evasion. The supplies should still be taxed in the country of consumption, i.e. in the country in which the transport of the goods terminates, but the new thing would be that the supplier will be obliged to pay VAT. The suppliers would pay VAT in their countries at the rate determined by the country of the receiver via a special tax return "One Stop Shop". Then the supplier's country should send the collected VAT to the receiver's member state. The receiver would pay VAT to the supplier and then would claim the VAT deduction in its country. The proposal should enable selected entities ("certified persons") who meet certain reliability criteria to use the existing method of taxation for a certain period.

The above-mentioned intention is partially embodied in the proposed amendment to the VAT Directive that should be effective from 2019. Further, the amendment contains changes to consignment stock arrangements, clarifies conditions for the exemption of a supply, and creates rules for the classification of transport in a chain supply of goods using the above-mentioned certified persons.

A certain difficulty of the intended changes may be an increased demand for cooperation between tax administrations in the individual member states.