Getting VAT right this time: Startups’ ask to the European Commission

December 1, 2016
interinstitutional agreement

Startups want to scale globally. For European Startups scaling in the EU Single Market appears to be the first step. However, currently startups find themselves in a nightmare of costly VAT reporting obligations instead of growing their business. They neither have the time, nor the resources to deal with 28 different VAT regimes. As part of completing the single market, the European Commission just proposed a Digital Single Market VAT Package to address this.

One step of the Commission’s plans is to create a substantive VAT-free threshold which would allow Startup to focus on business instead of complex taxation from day one. 58% of entrepreneurs find tax to be one of the main burdens when scaling across Europe. In order to help startups to grow and be competitive globally, the threshold has to allow for sufficient flexibility.

As the voice of Startups we brought over 50 Founders, CEOs and representative together to address the European Commission in favour of an ambitious threshold. With the new proposal for “Modernising VAT for cross-border e-commerce” being presented today and negotiations among EU Governments about to start – we want to make sure that the voice of startups is heard.

Walter Palma, Investment Manager at Caixa Capital, underlines why it is important for startups to act:

“The creation of a reasonable broad VAT-free threshold (say between €50k – €100k ) would go a long way to incentivizing the creation of EU-centric e-commerce businesses by allowing them to quickly and economically test their strategies in the marketplace without the burden and costs associated with cross-border VAT compliance  during the initial startup phase.”