{"id":2558,"date":"2019-06-04T11:30:09","date_gmt":"2019-06-04T11:30:09","guid":{"rendered":"https:\/\/way2vat.com\/?p=2558"},"modified":"2022-11-02T19:56:36","modified_gmt":"2022-11-02T19:56:36","slug":"why-were-waiting-for-the-eus-vat_gst-reforms","status":"publish","type":"post","link":"https:\/\/way2vat.com\/why-were-waiting-for-the-eus-vat_gst-reforms\/","title":{"rendered":"Why We\u2019re Waiting for the EU\u2019s VAT\\GST Reforms"},"content":{"rendered":"

VAT\\GST affairs are rarely simple. When your employees travel, they get charged foreign and local VAT\\GST on their business travel expenses. It\u2019s up to your organization to prepare a VAT\\GST return so that your business can claim a VAT\\GST refund on the goods and services your employee purchased on his or her trip.<\/p>\n

Your business also has to keep track of your cross-border transactions so that you can submit a list of them (the \u201crecapitulative statement\u201d) to your government body each year. VAT\\GST reclaim involves a lot of paperwork, sometimes just for small amounts each time.<\/p>\n

The Drawbacks of the Current EU VAT\\GST System<\/h3>\n

As you know already, making a VAT\\GST reclaim can be time-consuming, complicated, and confusing, especially when you\u2019re dealing with a foreign VAT\\GST refund.<\/p>\n

Your organization needs to gather valid VAT\\GST invoices that are written in a language, currency, and format that\u2019s not familiar to you. Then, the business needs to complete a VAT\\GST return according to the rules of the country where these purchases were made, but each country has different rules and regulations for VAT\\GST refunds. What\u2019s more, each member state charges different rates of VAT\\GST, so you have to check the foreign VAT\\GST rate before you start on your VAT\\GST return.<\/p>\n

It\u2019s little wonder that over \u00a315 billion of VAT\\GST goes unclaimed every year.<\/p>\n

The Scourge of VAT\\GST Fraud<\/h3>\n

But that\u2019s not the worst of it. The current, complex system for foreign VAT\\GST reclaim in the EU also makes it easy for fraudsters to flourish. Unscrupulous businesses buy goods across EU borders to take advantage of the foreign VAT\\GST exemption on cross-border transactions. Then they charge full local VAT\\GST when they sell the same goods within their member state, pocket the difference, and disappear too fast to be audited.<\/p>\n

The same goods keep getting passed across borders between different fraudulent businesses set up by the same shady characters. It\u2019s called Carousel Fraud.<\/p>\n

As much as \u20ac150 billion in unpaid VAT\\GST is lost every year, much of it to carousel and other VAT\\GST fraud. The money should be spent on resources for each country\u2019s citizens. Instead, it is often used to finance crime and terrorism. Honest businesses which are just trying to complete their foreign VAT\\GST reclaim and claim their VAT\\GST refund end up losing out through government attempts to crack down on foreign and local VAT\\GST fraud.<\/p>\n

Overview of EU VAT\\GST Reforms<\/h3>\n

That\u2019s why we\u2019re eager to see the EU introduce their local and foreign VAT\\GST reforms. Under the new rules, there will be:<\/p>\n