In April, the Commission unveiled an action plan on ways to amend the current EU VAT system to make it "simpler, more fraud-proof and business-friendly."
It is the first step towards a "single EU VAT area" which is equipped to tackle fraud, support business and help the digital economy and eCommerce.
The 'VAT gap', which is the difference between the expected VAT revenue and VAT actually collected in member states, was almost €170bn in 2013.
Cross-border fraud itself is estimated to be responsible for a VAT revenue loss of around €50bn a year in the EU.
SMEs have complained that current VAT rules are "burdensome" for companies and a particular area of concern is how the Commission's plans will take into account the issue of VAT thresholds in member states.
The Commission accepts that current VAT rules "urgently" need to be updated so they can "better support the single market, facilitate cross-border trade and keep pace with today's digital and mobile economy."
Ansip, the Commissioner responsible for the digital single market, says he will come forward by the end of this year with a legislative proposal to modernise and simplify VAT for cross-border eCommerce as part of the digital single market strategy.
This will include a proposal to ensure that ePublications can benefit from the same reduced rates as physical publications.
In 2017, the Commission will also table plans for a VAT simplification package designed to support the growth of SMEs and to make it easier for them to trade across borders.
On the VAT proposals, Ansip said, "Compliance with VAT obligations is a particular concern for SMEs, especially in the cross-border context.
"The importance of avoiding burden on small business with additional tax obligations is reflected in the proposal which contains well-balanced provisions as regards VAT compliance."
Ansip, a former Prime Minister in Estonia, added, "The proposal specifically exempts from the non-discrimination requirements those traders that fall under a national exemption VAT threshold from the need to register in order to account for VAT of other member states in order to sell electronically provided services."
He said, "This is provided in order to ensure that these companies - subject to the existing national rules - are not obliged to pay for VAT due to EU rules, neither in the member state where they are located, nor in those to which they provide their services cross-border."