On 5 June 2007, the European Council reached a political agreement on a comprehensive package of amendments to the VAT system, which is expected to lead, in the second half of 2007, to the adoption of legal acts amending the new VAT Directive and the procedure for refunds of VAT to EU businesses and extending the exchange of information between the Member States. Although several parts of the package are still under discussion, the author gives a brief overview of the most important features of the new VAT system to which the Council agreed and which should apply from 1 January 2009 at the earliest.