It is high time to have a permanent fraud-free VAT system in Europe, say S&Ds

S&D Euro MPs today welcome the European Commission’s plan to reform the VAT taxation system in order to eradicate the €50 billion lost every year in cross-border fraud. They also praise the Commission’s decision taken today to bill Amazon for the recovery of €250 million of illegal aid in Luxembourg.

S&D Group vice-president Udo Bullmann and S&D Group spokesperson for economic and monetary affairs Pervenche Berès stated:

“Today the European Commission has taken two important decisions to crack down on tax fraud at all levels and in all forms: the publication of a new VAT package and a final decision on the Amazon state-aid case.

“Again Commissioner Vestager has shown great determination and resolve in her handling of state-aid cases involving big multinationals. We support her efforts to stand up to those companies who think they are above EU rules. The new state-aid case involving Amazon reveals yet more proof of the need to move forward towards a genuine common corporate taxation in Europe.  We also think that Ireland must respect the Commission’s historic decision on Apple a year ago.

“Moreover, the Socialists and Democrats back the European Commission’s efforts to curb fraud on VAT across the Union. Every year, member states lose more than €151 billion in tax revenue due to VAT fraud, including €50 billion through the so-called "carousel fraud" on cross-border operations.  In these times of tight public finances, Europe cannot turn a blind eye to such blatant cases of fraud.

“The current European VAT system is based on transitional arrangements adopted in 1993. This system is beset with flaws and is inadequate for today's global and digital economy.  It is high time to move on to a definitive system that can close the loopholes and crack down on all forms of fraud. We support the proposed step-by-step approach which will allow for the introduction of quick fixes in the system, before the full implementation of the definitive system which will necessitate some time. We deplore, however, that no deadline has been defined for the entry into force of the definitive system. There is always the risk that what is transitional becomes permanent.”