The European Commission has been working on a project of a so called final VAT system. This should work in practice in such a way that, instead of applying the reverse charge regime for transactions provided between business entities within the EU, the VAT of the state of the final customer would already be charged by the supply provider. Subsequently, the VAT collected would be distributed into the beneficiary States through some kind of the mini one stop shop. In practice, this would mean that each accountant should know two to three VAT rates of 27 Member States and, moreover, be able to apply them correctly. Notwithstanding the fact that the classic VAT system, as opposed to the use of the reverse charge, contributes to the VAT chain frauds, which amount to EUR 150 billion per year within the EU. We will inform you of the further development of this madness.
