Kovács urges new VAT grouping rules

The tax commissioner of the European Union is pressing ahead with plans to synchronise community rules on VAT grouping schemes.

The move is part of a broader set of rules designed to crack down on cross-border tax evasion.

EU VAT legislation currently gives member states the option to regard as one single taxable person those who are closely bound to one another by financial, economic and organizational links, according to tax-news.com

László Kovács, EU tax commissioner, said: 'The practice has shown that the VAT grouping scheme, although being a simplification measure for operators, could lead to tax evasion. For that reason the Commission proposes clear guidelines on how to apply in practice this scheme.'

The VAT grouping option has been in operation since the 1970s, and 16 member states have implemented the schemes into national legislation.

Further Reading:

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