New EU VAT Rules Enter into Force
From January 1, 2013, new EU VAT rules enter into effect, which, Brussels claim, will make life much simpler for businesses across Europe.
First, electronic invoicing will have to be treated the same as paper invoicing, enabling companies to choose the VAT invoicing solution that works best for them. EU estimates show that the measure has the potential to save businesses up to EUR 18 B a year in reduced administration costs.
Second, member states will be allowed to offer a cash accounting option to small businesses with a turnover less than EUR 2 M a year. This means that these SMEs will not have to pay the VAT until it has been received by the customer, thereby avoiding cash-flow problems for them.
"These new VAT rules reflect what businesses in Europe need today: simpler procedures, reduced costs and support in applying solutions that best meet their needs," Algirdas Semeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, commented.
The second Directive on VAT invoicing was adopted in July 2010, and must be applied in all member states from 1st January 2013. It aims to simplify rules on VAT invoicing to reduce burdens and barriers for businesses.
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