The Economic and Financial Affairs Council meeting ended with an agreement on the conclusions on the future of VAT. Among other things, the Council stressed the importance of ensuring that initiatives designed to arrive at a simpler VAT system for businesses do not impose additional burdens on national authorities. It also agreed with the need to examine in further detail the present EU rules on the application of VAT to the public sector.

EU Finance Ministers adopted the conclusions on the future of VAT at the Council meeting celebrated on 15 of May. The conclusions include priorities for further work on this issue such as the importance of ensuring that initiatives designed to arrive at a simpler VAT system for businesses do not impose additional burdens on national authorities. In January 2012, the European Commission already proposed One Stop Shop for cross border VAT compliance. According to the Council, the strategic objective of simplicity should be seen as a two-way concept that applies to businesses and national authorities alike. In addition to this, Ministers call on the European Commission to further clarify the legal status of the information, as well as content, form, roles and responsibilities in connection with the proposed EU VAT web portal.

The Council considers into the conclusions that revenue generating capacity and the ability to sustain economic growth are inherent features of a more efficient VAT system. On the other hand, Ministers also agreed that continued work is needed to improve the robustness and resilience of the EU VAT system, including taking into account new technological developments.

In addition, the Council shows its agreement with the European Commission that the principle of “taxation in the Member State of origin of the supply of goods or services” remains unlikely to be politically achievable; and thus, Ministers asked the Commission to proceed with in-depth technical work to examine the ways to implement the destination principle.