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Ecofin Tackles VAT Fraud

by Ulrika Lomas, Tax-News.com, Brussels

25 November 2010


The European Council has adopted a decision aimed at enabling certain member states to better tackle fraud with regard to the payment of value-added tax (VAT) on mobile telephones and integrated circuit devices and their components.

The decision authorizes Germany, Italy and Austria to implement, on an optional and temporary basis, a reversal of tax liability as regards the payment of VAT on domestic supplies of those products. It also extends the period of validity of an existing authorization for the United Kingdom.

The aim is to close off certain forms of tax fraud, in particular so-called carousel schemes whereby goods are traded several times by different suppliers without VAT being paid to the tax authorities.

Applying a "reverse charge" principle, the decision allows, until December 31, 2013 in all four countries, liability for the payment of VAT on those goods to be shifted from the supplier (as normally required by EU rules) to the customer.

TAGS: tax | business | value added tax (VAT) | law | United Kingdom | enforcement | Austria | Germany | Italy | telecoms | European Union (EU) | Europe

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