The Commission has made a major change to the VAT system

The tax will already be paid in the country where the item is sold. The European Commission is preparing the biggest changes in value-added tax for a quarter of a century. VAT is also proposed for cross-border trade in the European Union (EU) and companies will be able to submit one-stop-shop declarations via an online portal in their own language.

"Twenty-five years after the creation of the single market, companies and consumers still face 28 different VAT regimes in cross-border operations. Criminals and possibly terrorists have long used these omissions by organizing fraud, "said Economic and Financial Affairs, Taxation and Customs Commissioner Pierre Moscovis.

"This anachronistic system based on national borders must end. Member States should consider cross-border VAT transactions as domestic operations on our domestic market by 2022. This will make life easier for EU companies doing cross-border trade, reduce bureaucracy and simplify VAT procedures, "the EU commissioner . Four amendments are proposed to enter into force as from 2019. These measures are explicitly requested by Member States to improve the day-to-day operation of the current VAT system until the final regime is fully negotiated and implemented.

They include:Tackling fraud: VAT will be charged on cross-border trade between businesses. This kind of trade is currently exempt from VAT, providing a simple loophole for unscrupulous companies to collect VAT and then disappear without transferring government money.

One-way shop: For companies that sell across borders, it will be easier to handle their VAT obligations through a one-stop shop. Merchants will be able to make declarations and payments using a single online portal in their own language and according to the same rules and administrative templates as in their home country. Next, Member States will pay directly to VAT, as is true for all sales of electronic services. Greater consistency: a transition to the 'destination' principle, where the final VAT is always paid to the Member State of the final consumer and is charged at the rate of that Member State. This is a long-standing commitment of the European Commission, supported by the Member States. It is already in force for the sale of electronic services.Less bureaucracy: simplification of billing rules, which allows vendors to draw invoices according to their own country rules, even when doing cross-border trading. Companies will no longer need to produce a list of cross-border transactions for their tax authorities (the so-called Recapitulative Statement). Today's proposal also introduces the notion of "certified taxable person" - a category of trusted business that will benefit from much simpler and time-saving rules. Four "quick fixes" were also proposed to enter into force by 2019. These short-term measures were explicitly requested by the Member States to improve the day-to-day operation of the current VAT system until the definitive regime has been fully negotiated and implemented. According to the EC estimates, over € 150 billion of VAT is lost each year, meaning that Member States omit revenue that could be used for schools, roads and healthcare. Of these, around € 50 billion - or € 100 per EU citizen each year - is expected to be due to cross-border VAT fraud. This money can be used to fund criminal organizations, including terrorism. It is estimated that this amount will be reduced by 80% thanks to the proposed reform.