Co-operation with the EU to reduce VAT fraud
Last month we communicated how countries in Europe, specifically the Benelux countries, were embarking on joint ventures with the aim of reducing VAT fraud.
The European Commission aims to establish a similar incentive with Norway, with the same underlying objective- to reduce the VAT gap.
This is a unique development- it is the first ‘alliance’ of its kind with a non-EU country.
As part of the agreement, tax authorities in both the EU and in Norway can share tax information and partake in activities to help fight VAT fraud similar to those outlined in the EU.
A recommendation from the European Commission plans to extend this joint initiative yet further, proposing new methods to further reinforce barriers against VAT fraud.
Reduction of the VAT gap is the primary objective of e-invoicing mandates, which are expected to be implemented with increasing frequency in the coming years in Europe. By extension, we can envisage the European Commission, and countries of their own initiative, to instigate measures to further reduce the VAT gap in a streamlined and efficient manner.