Commission set to simplify European VAT rules

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The European Commission has issued a public consultation on simplified VAT regulations for mobile operators within the EU

The announcement is in line with recommendations made by the International Travel Retail Confederation (ITRC) and the UK Travel Retail Forum, and if accepted will allow mobile operators to pay the tax from their home countries through a clearing system.

The current system, which demands that ferry and airline companies appoint tax representatives in each country to deal with the application of VAT, was attacked by trade associations as inefficient and costly. Based on those concerns the Commission asked London accountancy firm PriceWaterhouseCoopers to prepare a study on the procedure last year (DFNI November 1 2002), and the ITRC said its suggestions had been included.

"They have gone straight down the line on our recommendations," said director-general Keith Spinks, "and have acknowledged that the current situation is causing substantial problems for our industry. They have accepted a simplified set of rules that will benefit every operator in the EU and accession countries. I can't say for sure we are going to get that in the end, but we are certainly on the right lines."