That makes Vertex Senior Product Manager Aleksandra Bal’s new article, "Taxing Times Ahead: CEOs Must Prepare for Impending VAT Changes," especially well-timed. In the article, which was published by European CEO late last month, Aleksandra confirms that compliance concerns are justified when it comes to the European Union’s (EU’s) forthcoming changes to its value-added tax (VAT) system: “These worries,” she writes, “stem from the fact that proposed tax rules could require executives to make significant adjustments to their existing business models, enterprise resource planning systems and related business processes.”
While the digital VAT package adopted by the EU in December 2017 includes several changes that already have taken effect, more comprehensive rule changes – primarily focused on business-to-consumer e-commerce transactions – will start taking effect in 2021. Aleksandra describes three of these changes:
- The elimination of the EU distance-selling regime;
- The removal of the low-value consignment exemption; and
- The establishment of the tax liability of online platforms.
The article concludes with a rundown of the four quick fixes the EU approved to address VAT issues related to cross-border trade within the trading bloc. These changes go into force Jan. 1, 2020.
When it comes to tax compliance anxiety, clarity may be the best medicine, and Aleksandra’s analysis serves up an effective dose.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.