The EU Commission will offer in early March an action plan proposing VAT simplification and anti-VAT fraud measures, including an option for a reverse charge mechanism, officials said January 15.
“All member states are increasingly worried about the loss of VAT collection,” said Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem, speaking after first EU Economic and Financial Affairs Council (ECOFIN) meeting of the Dutch presidency.
Dijsselbloem said that the Commission’s VAT action plan will include an analysis of a reverse charge mechanism, among other options, including the Czech Republic’s request to pilot a reverse charge mechanism.
Dijsselbloem stressed that no decisions have been made, and said that anti-VAT fraud measures will again be discussed at the informal ECOFIN meeting in April.
Valdis Dombrovskis, Vice-President of the EC in charge of the Euro and Social Dialogue, said that EU states lose almost €170 billion annually to VAT fraud. At the same time, businesses face a complex and inefficient tax collection system, especially when they operate cross-border.
He said that both issues will be addressed in the action plan, which will focus on, but not deal exclusively with, cross-border transactions.
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