Labour MEPs: New EU VAT laws will crackdown on £4.3bn of tax fraud

New EU laws on VAT collection will give authorities the tools to go after the €5 billion (£4.3bn) lost to public services through VAT fraud, Labour MEPs said as the European Parliament gave the green light to the measures today.

The legislation is part of a wider EU action plan on VAT e-commerce, which is set to come into force from as early as January 2021. The package aims to achieve better VAT collection from online sales by simplifying the rules around VAT and also by ensuring online market places are part of the fight against tax fraud – they will be required to share information with tax authorities to enable them to tackle tax fraud from online sales.

The VAT e-commerce package, which the proposals on cracking down on tax fraud are part of, also includes proposals to make online behemoths like Amazon and eBay liable for collecting VAT on sales they facilitate for goods sold from outside the EU worth €150 or less.

Today’s vote affirms the European Parliament’s support for the proposals, which will allow for a swift finalisation of the legislative procedure and enable the necessary steps for implementation at national level to meet the 2021 deadline.

Neena Gill MEP, Labour’s European Parliament spokesperson on economic and monetary affairs, said:

“While Boris Johnson and the Conservative Party wish to turn Britain into a deregulated, low-tax Singapore on steroids where the super-rich get super-richer, the EU continues to take on the tax fraudsters and online giants who pay minimal tax on maximum profits.

“The amount lost to national governments through VAT fraud from online sales is €5 billion, £4.3 billion, that’s five billion euros not being spent on schools, 4.3 billion pounds not being invested in health services – and the EU’s crackdown on this theft is yet another reason why we must remain in the EU.

“If Johnson and the Tories, in league with Farage, under the thumb of Trump and beholden to billionaires, win the election and take us out of the EU, millions of working people will suffer while fraudsters and tax dodgers will rub their hands with glee.”