Campaign group proposes VAT MOSS interim threshold

With the third VAT MOSS return looming for businesses on 20^th October, a campaign group has issued a stark warning about potential effects on the European digital single market.

EU VAT Action has highlighted how the time involved in implementing new regulations will cause problems and has asked for an ‘interim’ threshold to help SMEs in the transition period.

New measures

As part of new measures aimed at combating tax avoidance, the European Commission (EC) launched a new online business taxation system at the start of the year.

According to the group, the EC has now expressed its support of a VAT threshold for the controversial new cross-border digital sales tax.

The new rules and regulations meant that many SMEs were drawn into the VAT payments system for the first time, leading some to stop selling their digital services in other EU countries due to the complexity of the process.

‘Brilliant news’

Clare Josa, EU VAT Action co-founder, said that it was “brilliant news” that the EC is getting behind the idea of a threshold. However, the time period involved might still be a problem for many businesses.

“The commission cannot work faster than the current legislative timetable permits,” Josa said. “They can’t propose the legislation till the end of next year. It could still take between two and five years to pass.”

EU VAT Action says that many small businesses will have ceased trading by the time new legislation is passed.