The Definitive VAT System: Breaking with Transition

Abstract

This short paper reviews the EU proposals for a definite VAT system, concluding that, together with the newly approved digital package, they represent therefore real progress the previous VAT system. Yet, they are not enough. A fair, efficient and fraud-proof EU VAT system requires, in addition to those proposals, reform of the rules currently governing the VAT base, namely VAT rates and exemptions.