Malta will take forward the EU’s proposals on VAT reform when it assumes the Presidency of the Council of the EU in January 2017, the territory’s Minister of Finance, Edward Scicluna, according to Tax-News website.
Under the EU’s VAT reform plans, by the end of 2016, the Commission is to put forward legislation that would extend the current One Stop Shop concept to all cross-border e-commerce, including distance sales. It will also introduce common EU-wide simplification measures to help small start-up e-commerce businesses, and streamline audits for companies engaged in the sector.
Further, the Commission will seek to improve cooperation between tax administrations including from non-EU countries and with customs and law enforcement bodies, to strengthen tax administrations’ capacity for a more efficient fight against fraud.
The Commission will also ensure that member states have greater freedom on setting value-added tax rates, including providing for technology-neutral VAT treatment for digital economy supplies, by allowing the same VAT treatment for the digital equivalents of traditional supplies (for example, for e-books and tangible books).
Scicluna highlighted the importance of seeing through the implementation of the reform when addressing the Malta Institute of Management’s VAT and EU Conference. He said that there are three significant shortcomings with regards current VAT rules.
He said VAT is not responsive enough to the shifting landscape posed by e-commerce, VAT puts an undue burden on small entrepreneurs and EU reform should remove restrictions on member states on the imposition of particular rates of VAT on certain goods and services so as to introduce an “element of flexibility to address the needs of certain sectors.”
Scicluna also referred to Malta’s newly set up Joint Enforcement Task Force, which will use sophisticated intelligence to rein in tax evasion.
