Is harmonisation of VAT rates still necessary in the European Union?

Abstract

For more than 20 years, a principle of taxation of goods and services in
the state of destination has been in force in the European Union – VAT is
levied according to the rate applied in the state of the purchaser of goods.
The principle was introduced due to, inter alia, the differences in the VAT
rates in individual Member States, and was planned to operate temporarily,
especially until the VAT rates harmonisation process is completed. The
intended “definitive” VAT regime was based on the principle of taxation in
the Member State of origin, i.e. at the rate applicable in the country of the
supplier. The recently published Commission Communication announced
several actions towards the change in the rules on taxation of the cross-
-border transactions so that the suppliers could levy VAT on the purchasers
similarly as it happens in case of domestic transactions, i.e. in accordance
with the rates applicable in the state of destination of goods. The Article
aims to present the general conclusions on the results of the research into
the need to harmonize the rates, particularly in the light of the latest plans
of the Commission.