The European Commission initiatives presented to simplify the VAT system in cross-border trade include useful suggestions.
Now if traders reach a certain turnover threshold in sales in other countries they have to register for VAT in all the different EU countries. This paperwork should be over with in future. The European Commission announced in its plan that one-stop-shops should be created for the B2C-sales. At this centralized point traders should be able to declare the foreign VAT of their sales to private customers in other EU countries; the revenues can be registered and tax paid, and the traders can get assistance in their own country and in the German language. However, the problem remains that the trader must continue to deal with foreign VAT laws. The application of the correct tax rate, which is already difficult within Germany, is likely to remain a hurdle for many traders.
The problems with cross-border trade could increase, if member states can vary the products that are tax-exempt or of reduced rate. The corresponding EU proposal to release the VAT rates could lead to a fragmentation of tax rates. As a result, traders must learn even more about the foreign regulations.