This short paper discusses the introduction of a general reverse-charge mechanism in the EU VAT system to address missing trader fraud. It argues that this move presents significant disadvantages, the most important of which is that it effectively transforms the VAT into a de facto Retail Sales Tax (RST), by removing the self-enforceability features that characterises it. It concludes that whilst a generalised reverse-charge mechanism may well kill missing trader fraud, in the process it may also give birth to a widespread, more fundamental, VAT compliance problem that will be much harder to either contain, or combat.
Source: Rita de la Feria
Latest Posts in "European Union"
- Commission calls on BELGIUM, FRANCE, and MALTA to fully implement the new EU VAT rules for the special SMEs scheme
- From matchmaker to supplier: deemed supplies and platform classification under EU VAT
- European Commission Report Highlights Uneven VAT Rate Exemptions Across EU Member States
- EU Packaging Regulation Faces Legal Challenges Over Reusability, Plastic Ban, and Deposit Requirements
- European Union Adopts Peppol PINT Billing Standard for E-Invoice Interoperability
