Ecofin Considers VAT Fraud Measures
The Commission's plans for a quick response mechanism and a reverse charge mechanism to combat VAT fraud were discussed at last month's Ecofin meeting, the regular gathering of Finance Ministers from the EU Member States. No agreement was reached on the matter with some Member States voicing concerns on the measures proposed. However, the Ministers welcomed the recent progress of the so-called “Two Pack” proposals. Under these proposals, Euro zone Member States will have to submit draft budgets by 15 October. At this stage, the bringing forward of our usual Budget Day date from the first week in December is almost inevitable. It would be intolerable if this in turn necessitated earlier tax payment and filing dates for the self-employed and for companies.
The press release issued notes that the presidency remains open to the aim of seeking adoption of the legislative proposals by the Council before the end of June.
The package proposed by the Commission includes:
- a proposal for a directive aimed at enabling immediate measures to be taken in cases of sudden and massive VAT fraud (“quick reaction mechanism”)
- a proposal for a directive intended to allow member states to implement, on an optional and temporary basis, a reversal of liability for the payment of VAT on the supply of certain goods and services (“reverse charge mechanism”)