European Commission VAT Expert Group Workshop summary, 14-15 October, Brussels

On 14 and 15 October, Jan Sarnowski, head of B2RLaw’s tax department, participated in a workshop of the EC VAT Expert Group in Brussels. B2R Law is one of two Polish organisations selected by the Commission to represent Polish tax advisors in the VAT Expert Group. The two-day discussion focused on recommendations regarding the current challenges of European VAT, as well as general directions of development of this tax in the next 5, 15 and 25 years.

What were the key issues discussed?

The EU has ambitious goals for sustainable development. Should VAT play a role in achieving the EU’s sustainability goals? What would be the effectiveness of such measures and how would they affect the complexity of the European VAT system?

Today, the world’s most valuable resource is no longer gold or oil, but data. The analysis of relevant and reliable data is crucial in many areas of the private economy, as well as in the public sector, in order to protect the VAT revenues of countries threatened by tax fraud. Managing the data comes with challenges in terms of privacy and data security. How much should tax administrations know about taxpayers to ensure both the effectiveness of tax collection and the rights of individual citizens and confidential business information?

The EU platform economy is growing rapidly, from an estimated €3 billion in 2016 to €14 billion in 2020, affecting an increasing number of business sectors (e.g. finance, transport, accommodation and retail). Currently, online platforms don’t fit comfortably into the international VAT framework. How can new payment and reporting obligations be designed to avoid distortions of competition? Is there a way to ensure VAT neutrality in the choice between traditional and e-commerce distribution channels?

The results of the workshop will be presented to the new European Commission (2024-2029) in December 2024.