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In the context of the EU orientation towards the development of the free economy, the relevant legislative norms are regularly changed. This time the reforms touched upon the VAT calculation system.

The relevant changes are detailed in the directive adopted by the EU Council of 22.06.2018. According to this document, the normative rate of VAT is set at the level of 15% for all countries – EU members.

The adoption of a single bet is aimed at avoiding discrepancies in the European Union VAT and equalizing the rights of all countries to the freedom to conduct economic relations.

In addition, the directive includes the agreement of the participants to introduce new instruments of compensation for losses due to fraudulent transactions and simplification of the information exchange system in order to strengthen cooperation.

In response to the EU directive, the 16.06.2018 of the English House of Commons amended the bill on cross-border trade. As a result of the adoption of this document, England is excluded from the European Union VAT zone. The period of withdrawal from the European VAT area by Great Britain is the end of the first quarter of 2019.

In addition, according to the British government, the United Kingdom intends to create an internal VAT rate system that is different from the EU zone.

After the UK statement, the EU introduced a draft of changes in the system of accrual of tax on added value: it is planned to change towards the rules of payment of taxes on the principle of end-user. That is, all goods/services will be taxed strictly according to the legislation of the country – consumer.

Today, the system of levying VAT on the 2nd principles is in force:

  • If the company – the seller and the recipient company are registered in the territory of the EU and have a tax number, the value of goods/services does not include VAT;
  • In some cases, the payer of the tax is recognized as the final recipient of the goods, where the VAT rate is calculated according to the regulations of the country of the buyer.

In addition to the changes in the VAT collection system, the EU plans to develop a single system of VAT control by the end-owners – One – Stop Shop. Its implementation will allow small and medium businesses to better understand the technology of tax calculation and correctly calculate the amount to be paid. By the way, the simplified reporting system will be available also to businessmen, registered abroad, but supplying goods to the countries-members of the European Union.