Europe makes VAT reform plea

, the
EU’s head of tax,
has called for a ‘fundamental change’ to the VAT system in order to fight tax

According to the FT
VAT fraud costs the continent €250bn (£170bn) annually, a matter
that was discussed by finance ministers in Berlin this weekend.

Germany finance minister Peer Steinbrück used the meeting to call for a
complete ‘reverse charge’ mechanism, which would turn Germany’s VAT system on
its head.

Under the system sales tax will be charged at the end of the supply chain

The move is a counter to rampant MTIC fraud, but has been opposed by most EU
countries, who say it could create new fraud risks and is an administrative

Kovacs is more in favour of increasing cooperation between EU states, and
reforming VAT charged in e-commerce.

Further reading:

New VAT rules to curb carousel fraud set for June

Treasury finally secures reverse charge VAT

Carousel fraud bill to reach £5bn

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