In a concerted effort to combat carousel type fraud the EU Commission has announced some far reaching changes to the way intra-EU transactions taxed. In fairness, the sytem introduced in 1993 permitting zero-rating for supplies of goods between VAT regsitered EU businesses was only ever meant to be a stepping stone to a more definitve system which envisaged businesses charging a harmonised VAT rate to each other. Alas this dream was not to be!
In its stead is proposed a new 'definitive' system which will tax cross border supplies of goods where they are consumed - instead however of the customer bearing the responsibility for the payment of any tax due the new rules will require the supplier to pay any VAT due. Quite how this will be managed has not yet been finalised. It is likely, however, that it will run similarly to the MOSS (Mini one stop shop) scheme.
Exceptionally, where supplies are made to a 'certified taxable person' the supplier will not be required to account for or pay any tax due. The Certified Taxable Person is still a drawing board concept at present but promises to be a more tightly controlled regime than the existing VIES verification system.
Amidst the ever tightening regulation, the good news is that the new system may spell the end for the EC Sales List!