February 5, 2023

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The European Union launches the electronic billing system for companies – Europe

“In difficult economic times like these, public finances need strong tax revenues to support both our public services and the investment mountain for green and digital transitions and energy security. At the same time, citizens demand tax justice and strong action against fraud and tax evasion.” This was stated by the EU Commissioner for the Economy, Paolo Gentiloni, as he presented the new package of EU initiatives to harmonize the tax system with the digital world and to improve and digitize corporate VAT.

European Commission launches e-invoicing system for companies It operates across national borders in the European Union. The new reporting system introduces real-time digital communication for VAT purposes to intensify the fight against fraud, especially the so-called “carousel”. Switching to the electronic billing system, according to the estimates of the European Union, It will help reduce VAT fraud by up to €11 billion annuallyo Reducing administrative and compliance costs for European companies by more than €4.1 billion annually over the next ten years.

In 2020, EU countries lost 93 billion euros in value-added tax revenues, a quarter of which can be directly attributed to fraud. “These losses are clearly harmful to public finances,” Brussels highlights, highlighting that measures proposed today, such as electronic billing, “will help member states collect up to 18 billion in value-added tax revenue annually.”

The European Commission also launches New tax transparency rules For all cryptocurrency providers: regardless of their size or location, they will be obligated to report all transactions of customers residing in the European Union. “Tax authorities currently lack the necessary information to monitor revenue obtained using crypto-assets, which can be easily traded across borders. This severely limits their ability to guarantee that taxes are actually paid” resulting in “European citizens” missing out on “important tax revenues,” he said. Brussels highlights.

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Italy is the first in the European Union in absolute terms not to collect VAT: In 2020, the gap was 26.2 billion (20.8%). It is followed by France with 14 billion in absolute terms (8%), and Germany with 11.1 billion, equivalent to 4.8%. In percentage terms, Italy is ahead of Malta (24.1%) and Romania (35.7%). In 2019, the difference between the VAT collected and the expected VAT in Italy was 31.08 billion (in absolute terms the highest value) which equals 21.8%.