Brussels, 01/02/2010 (Agence Europe) - With its adoption last week of the consultative report by David Casa (EPP, Malta), the European Parliament economic and monetary affairs committee backed the reverse charge procedure on value added tax (VAT) being applied, on a voluntary basis at national level, to the greenhouse gas emissions trading scheme. This measure, which was proposed by the European Commission in October of last year, is to tackle “carousel fraud” - estimated by Europol to have cost €5 billion over an 18-month period in six member states alone (see EUROPE 10040) - more effectively. The Casa report will be put to the vote in the plenary session of Wednesday 10 February. “Carousel fraud is an extremely complex and sophisticated form of fraud that is conducted by professional criminals. These activities negatively impact member states' revenues and hinder the proper functioning of the internal market. We must do everything possible to significantly reduce these criminal activities,” Casa says in a press release.
MEPs call on member states, when determining the supply of goods and services to which the VAT reverse charge mechanism will apply, to compulsorily include greenhouse gas emissions trading and, at most, two from the following list: mobile phones, integrated circuits, perfumes and precious metals. Member states will be able to require taxpayers receiving the goods or using the services concerned to submit a report in order to clarify whether or not their activities are professional in nature. The assessment criteria which allow comparison of fraudulent tax activities, before and after application of the reverse charge procedure, will be determined by the Commission following consultation with the VAT committee representing the member states. The Commission will, on the basis of national reports, submit a report by July 2014, assessing the effectiveness of implementing the VAT reverse charge mechanism, and its cost-benefit ratio in order to ascertain whether it would be worth extending the scope of the measure.
At the start of December, the Ecofin Council reached unanimous political agreement on the draft directive. The agreement covers only greenhouse gas emissions quota trading, with discussions to continue under Spanish Presidency on applying the VAT reverse charge procedure to the other goods suggested by the Commission (see EUROPE 10032). (M.B./transl.rt)