VAT evasion on imports tackled by European Council

The European Council has announced plans to strengthen moves against VAT evasion on imports.

Under the directive, conditions in which the importing of goods is exempt from VAT if followed by a supply or transfer of those goods to a taxable person in another member state, according to tax-news.com

Provisions under the directive include the VAT identification number of the importer issued in the member state as well as the customer, and evidence that the imported goods are intended to be transported or dispatched across borders.

The European Commission has given a high priority to cracking down on VAT fraud, particularly missing trader intra community (MTIC) fraud, also known as carousel fraud.

The European Council said the import of goods is exempt from VAT if followed by a supply or transfer of those goods to a trader in another member state.

'Inadequate implementation of this exemption in national law has led to difficulty in following-up the physical movement of the imported goods. Experience shows the increasing use of this particular exemption in missing trader fraud schemes,' the Council said.

Further reading:

European Commission probes privacy concerns over tracking technologies

BDO wins High Court battle with HMRC over commission VAT