Austria enacts quick reaction reverse charge on VAT fraud

Tue 29th Oct 2013

Austria is to become the latest European Union member state to take advantage of the new EU quick reaction VAT anti-fraud mechanism. The measure will allow the use of the reverse charge on certain Austrian VAT transactions to help prevent fraud.

EU anti-fraud measure to plug VAT gap

The new mechanism to enable member states to change reporting and VAT obligations at short notice was brought into place this summer.  It enables member states to gain permission from the European Commission within 30 days to apply the VAT reverse charge mechanism.  This shifts the burden to report sales VAT onto the customer on domestic supplies.  This helps reduce the opportunity to commit VAT fraud through missing trader fraud.

The new EU mechanism for applying the reverse charge is only available to a narrow range of goods.  Member states can only use the regime when they detect large, unexplained transactions which appear suspicious.

Austria applies VAT fraud measures 1 January 2014

Austria has sought approval for the introduction of the reverse charge on a range of goods which are susceptible to fraud by criminal gangs.  These include:

  • the wholesale supply of gas and electricity
  • supply of precious and other valuable metals
  • provision of laptops, tablets and games consoles.

The new measures will come into effect on 1 January 2014.