A single tax location and radical changes to the indirect tax systemss, experts warn. are vital to make a success of the single European market, EU experts warned this week.
Michael Aujean, head of the EU VAT directorate, told members of the European Public Services Union there had to be a single location for taxing European companies.
‘Making declarations in every state imposes far too heavy a burden on companies, and a single location would be best in terms of administration costs and efficiency. A single company inspector would be more efficient too.’
Such a system could mean one organisation taking responsibility for indirect tax across the whole of Europe.
Aujean said the money collected would then be divided between member states. When Canada implemented an apportionment system for its provinces it cost $500m to set up.
Aujean added: ‘It might cost us 500m ecus, but this is not an exorbitant figure considering the value of international trade.’
A Customs & Excise spokesman said such a system was already being trialled in the UK and Holland.
Aujean also said there was a directorate proposal ‘on the table’ to change the eighth directive covering reimbursement. ‘The country of establishment of any company should decide about reimbursement,’ he said.
‘If a Belgian company is billed in Luxembourg, it should be able to claim the tax back from the Belgian government, which could then get the tax from the Luxembourg government. This would ease the burden on companies.’
Customs said the proposal was ‘interesting’, but warned progress was unlikely to be swift on such a directive.
Other EU proposals being put before the member states include: harmonisation of VAT on hotels, creation of a standard for European invoices, and harmonisation of electronic billing.
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