An Introduction

In order to address the inherent problems of the current taxation model for the business to business supply of goods, the European Commission has identified five alternative taxation models. The European Commission has appointed EY to undertake a study of the VAT and cost implications of these alternative taxation models in order to identify whether the following key drivers are met:

► That doing business across the EU must be as simple and safe as engaging in purely domestic activities; and

► The cost of VAT compliance for business activities across the EU must be reduced.

This study includes a survey for businesses across all 28 Member States to complete in order for EY to analyse the impact of any potential change to the current legislation.

Completing the survey

The survey is comprised of a total of 31 questions.

The survey covers general questions about your business, specific questions about your VAT profile with regard to sales and purchases as well as your trading partner information. This information is needed so that we can calculate the potential cash-flow impact of the options. We also require information in relation to the costs that you incur in order to comply with the VAT legislation. Both staff costs as well as costs incurred from third parties, is needed so that we can calculate the potential cost to your business both in year one and thereafter of implementing the proposed options. Lastly some of the options require your business to undertake additional tasks and we wish to understand the potential cost to your business of complying with these additional requirements.

In order to be able to complete the survey in minimum time (approximately 40 minutes) possible it would be useful to have on hand the following information:

• Number of countries in which the company is registered for VAT (or if completing the survey behalf of a VAT group, the number of countries in which the Representative Member of the group is registered for VAT).

• VAT returns covering the period 1 January 2013 to 31 December 2013 (or closest 12 month period if submitting quarterly or returns covering a non-standard VAT return period).

• EC sales lists covering the period 1 January 2013 to 31 December 2013.

• Intrastat arrivals documents covering the period 1 January 2013 to 31 December 2013.

• Estimate of costs incurred in relation to VAT compliance, for example: salary costs, training costs, IT costs relating to VAT accounting, external advisory fees etc.

• Trade receivables figures and total sales figures from your most recent Annual report/Accounts, or similar data from your finance team.

• Trade payables figures and total purchases figures from your most recent Annual Report/Accounts or similar data from your finance team.

Some of the questions within the survey require certain breakdowns of various transactions/costs etc. that we appreciate you may not have firm details of. Responses to these questions are meant to be indicative and therefore estimations for these questions are sufficient.

Should you have any questions whilst you are carrying out the survey, please do not hesitate to contact any of the members of the team:

Audrey Fearing (afearing@uk.ey.com, +44 207 951 6531)

Tony Jaras (tjaras@uk.ey.com, +44 207 951 4620)

Iona Brooks (ibrooks@uk.ey.com, +44 207 951 2293)

Edward Whittle (ewhittle@uk.ey.com, +44 207 980 9442)

Kishen Patel (kpatel1@uk.ey.com, +44 207 951 6102)

When compiling the results to the survey, all information will be anonymised and will not be provided to the European Commission or any third party.

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