The European Commission has proposed to extend existing anti-fraud reverse charge powers in the principal VAT Directive (2006/112/EC) until 31 December 2025.
Under articles 199a and 199b of the Directive, EU member states are allowed to introduce reverse charge measures that shift the responsibility of accounting for VAT from a supplier to the customer where there is a risk of fraud. Examples of supplies often subject to these anti-fraud reverse charge measures include emissions allowances, mobile phones and gas and electricity.
These existing powers are due to expire at the end of June 2022 by which point it had been expected that a ‘definitive VAT system’ would have come into force rendering them unnecessary. As the definitive VAT system is not expected to enter into force as planned on 1 July 2022, an extension to the expiry date of these anti-fraud provisions is required. The European Commission has therefore proposed an extension until the end of 2025.
The European Commission has proposed to extend existing anti-fraud reverse charge powers in the principal VAT Directive (2006/112/EC) until 31 December 2025.
Under articles 199a and 199b of the Directive, EU member states are allowed to introduce reverse charge measures that shift the responsibility of accounting for VAT from a supplier to the customer where there is a risk of fraud. Examples of supplies often subject to these anti-fraud reverse charge measures include emissions allowances, mobile phones and gas and electricity.
These existing powers are due to expire at the end of June 2022 by which point it had been expected that a ‘definitive VAT system’ would have come into force rendering them unnecessary. As the definitive VAT system is not expected to enter into force as planned on 1 July 2022, an extension to the expiry date of these anti-fraud provisions is required. The European Commission has therefore proposed an extension until the end of 2025.
