Brussels, 19/10/2010 (Agence Europe) - EU finance ministers reached unanimous political agreement on 19 October on a draft decision allowing Germany, Italy and Austria a temporary (until 31 December 2013) derogation from the general VAT regime (Article 193 of Directive 2006/112/EC) for the payment of value-added tax (VAT) on mobile telephones and integrated circuit devices and their components (see EUROPE 10237). The United Kingdom which already applies this regime was authorised to keep it in place until the same date.
The decision will allow the four countries to use the reverse charge mechanism for supplies of these products where the value is equal to or more than €5,000. Application of the mechanism which consists of transferring payment of VAT from the supplier, at the various stages along the chain, to the final purchaser of the goods - the consumer - provides a more effective way of tackling VAT fraud, especially so-called carousel fraud.
The derogation expiry date has been brought forward from the initial plan (2013 rather than 2014) at the insistence of France, whose view is that such derogations to the general VAT regime should be exceptional, highly targeted and, as far as possible, limited in time.
The decision will bring progress on tackling fraud and tax evasions since it will allow the four countries to take more effective national action against this type of fraud, Taxation Commissioner Algirdas Šemeta said in a press conference. (F.G./transl.rt)