Europe makes VAT reform plea
Top EU tax chief says VAT system must be reformed to conquer fraud
Laszlo
Kovacs , the
EU’s head of tax,
has called for a ‘fundamental change’ to the VAT system in order to fight tax
fraud.
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
nightmare.
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