European Parliament Backs Anti-VAT Fraud Measures

by Ulrika Lomas, Tax-News.com, Brussels

10 December 2008

The European Parliament is backing a plan to accelerate the collection and exchange of data on intra-Community transactions to combat value-added tax fraud.

The plan proposes that companies make monthly electronic statements of their data, as opposed to quarterly (often paper-based) statements. It would also impose a one-month, rather than three month, deadline on member states to share this information.

The European Parliament adopted two reports from José-Manuel Garcia Margallo, a member of the European People's Party (Christian Democrats) and European Democrats, covering different aspects of the proposals. While supporting the changes, MEPs adopted amendments to clarify some procedural aspects, and ensure member states publicise and share best practice.

The reports also make clear that the Commission should review the administrative burden of these arrangements after two years.

As usual with taxation policy in the EU, Parliament’s role is consultative and if the changes are to be adopted these will need to be adopted unanimously in the Council. However, such measures already have the support of European Finance Ministers, who reached an agreement in principle at last month's Ecofin meeting to strengthen the legislative response to VAT fraud, including through new mechanisms to facilitate the effective exchange of information.

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