EU fails to agree fraud general VAT reverse charge

Tue 29th May 2018

At Friday’s EU meeting of the finance minister, ECOFIN, member states failed again to agree on a generalized reverse charge to combat carousel VAT fraud.

The proposal was last discussed at ECOFIN in June 2017, and no agreement was reached.

The mechanism, which zero rates VAT on domestic transactions above €10,000, was championed by the Czech Republic. Countries such as France and Cyprus blocked it due to concerns about it distorting the free market operations and VAT operating throughout the supply chain. Later at the ECOFIN meeting, the Czech representation blocked the proposal for reduced VAT rates on electronic books and online journals.

The proposal now moves to the Austrian presidency.

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