French scupper UK's anti-carousel fraud efforts
French resistance instrumental in taking EU VAT levy system changes off the debating table at high-profile summit
Government efforts to help the
Treasury combat
carousel fraud have been dealt a severe blow as three
EU countries spearheaded by
France derail a key policy overhaul.
UK representatives met with French envoys in a bid to resolve the dispute
before a high-profile meeting of finance ministers commenced, but a compromise
could not be reached, causing the proposal to be removed from the agenda.
France, supported by Portugal and Spain has been in opposition of a move that
would change the way VAT is charged on goods targeted by gangs.
Currently VAT is charged between each link of the chain which gives
fraudsters the opportunity to ‘reverse charge’, or claim multiple VAT refunds,
but the UK had called for VAT to be charged to the final customer at the end of
the supply chain after the purchaser had received the in-demand items, which
include computer chips, mobile phones and
PDA’S.
France, Portugal and Spain were concerned that such a change would result in
scammers shifting their operations to other countries and products, possibly
undermining the entire sales tax system.
Related links:
VAT registrations up for sale to fraudsters
Britain’s carousel fraud battle suffers
European blow