The EU Council has authorised the UK to introduce a reverse-charge mechanism for mobile phones and computer chips.

According to the Council Press Release, the Council adopted a Decision authorising the United Kingdom to introduce a special measure derogating from Article 193 of Directive 2006/112/EC on the common system of the value added tax. (7583/07)

Article 193 of Directive 2006/112/EC establishes that the person liable for payment of the value added tax (VAT) is the taxable person supplying the goods. The purpose of the derogation granted the United Kingdom is to place that liability on the taxable person to whom the supplies are made, but only under certain conditions and exclusively in the case of mobile telephones and computer chips/microprocessors.

The purpose of this measure, which will be valid only for a short period, is to tackle tax evasion in relation with certain carefully defined products as the scale and size of the tax evasion has resulted in considerable tax losses.

The topic of VAT fraud was on the agenda for the ECOFIN meeting held in Berlin on 20 and 21 April.