Britain’s carousel fraud battle suffers European blow

The UK’s attempts to fight VAT fraud with the implementation of a reverse
charge mechanism could be scuppered after Germany, Austria and France who
objected to the request.

The UK has already received the backing of the
European Commission
to implement the mechanism on the import of mobile phones, computer chips
and microprocessors.

, however, reports that Germany, Austria and France have objected to the
application. The UK needs the backing of all European Union finance ministers to
be granted an exemption from EU
VAT rules.

Germany and Austria have objected because their request to implement the
reverse charge more broadly was refused earlier this year. France fear that the
reverse charge will simply create opportunities for a different kind of fraud.

‘The Germans and Austrians are not happy. Other states don’t like the reverse
charge mechanism at all, such as France, as they consider it will create fraud
in different ways,’ an EU diplomat was quoted as saying.

Further reading:

Carousel fraud deadline looms for programmers

VAT fraud out of control

Carousel fraud may force tax hikes

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