European countries have successfully integrated their economies for more than six decades. While the European Union has continuously conducted large reform efforts in almost all areas of economic and financial policy, the EU VAT directive – originally introduced in the 1970s – has been a major exception for an extensively long time. At the same time, intra-European cross-border transactions have increased strongly in quantity and quality. New business models and transaction types have emerged. Hence, the current tax system is challenged more than ever. With rising administrative costs and tax revenues being in danger, an overhaul of the current VAT system is urgently required.
Paul Maeser, member of the FES Managerkreis Working Group on Finance, is co-author of a study on the subject which describes the current state of the current reform debate and outlines the opportunities of the suggested reform plans. He will discuss the paper with an expert from the EU Commission.