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ECON second draft report on EU VAT fraud proposals

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The EU Parliament’s ECON committee has published a further draft report containing a large group of amendments to the Commission’s proposals for tackling VAT fraud through increased administrative cooperation between national tax authorities and law enforcement bodies. This follows the first draft report published on 23 April (https://bit.ly/2KrVzdV).

These measures are a key part of the Commission’s VAT action plan and progress towards a definitive VAT regime, although the Council failed to reach unanimous agreement the proposal as presented at the meeting of ECOFIN on 25 May.

The ECON committee’s latest amendments include:

  • dropping the reverse charge mechanism to focus instead on the destination principle;
  • allowing authorities access to VAT identification numbers and the register of certified taxable persons when granting exemptions;
  • allowing two-way information exchange between Eurofisc and Europol;
  • allowing the Commission to conduct visits and have access to all shared information; and
  • development by the Commission and member states of a common statistical approach to quantifying and analysing VAT fraud.

The report stresses the importance of establishing effective inspection mechanisms, particularly with the rollout of the mini-one-stop-shop, ‘through which a significant proportion of states’ VAT will be collected in other member states’.

Part of an effective inspection system would be ‘to allow a single member state to ask for an administrative enquiry to be carried out, and to participate in that enquiry’. The report explains that: ‘officials in the requesting state are often more familiar with the file, and it is therefore crucial that they are able to play an active part in the inspection, while upholding the rules in force under the law of the country concerned’.

See https://bit.ly/2sK2Ygo.

Issue: 1402
Categories: News , VAT
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