- The VAT reverse-charge mechanism shifts VAT liability from supplier to customer to curb missing-trader fraud, and is used for certain high-risk sectors under Articles 199a and 199b of the VAT Directive.
- Both measures are temporary and currently set to expire on 31 December 2026, prompting debate in the European Parliament over whether to extend them.
- An ECON draft report on 3 June 2026 called for a substantial multiannual extension of Article 199a and easier activation of the Quick Reaction Mechanism, while ViDA is assessed.
- An EPRS study found the mechanism works best when targeted at clearly identified risky sectors, but warned it does not eliminate fraud and can push it elsewhere, with fragmentation becoming a concern.
- ECON amendments on 9 July showed divisions: EPP supported a longer extension, while S&D wanted any extension to be clearly transitional toward a harmonised EU VAT system.
Source: etaf.tax
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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