Brussels, 01/12/2008 (Agence Europe) - On Monday 1 December, the European Commission adopted a draft proposal to amend directive 2006/112/EC and step up the fight against value added tax (VAT) fraud (EUROPE 9770 and 9667). This proposal is the first in a raft of measures that the European institution is developing in a specific action plan.
According to current rules, the import of goods is exempt from VAT when it is followed by a transfer of these goods to another Member State. This provision is not implemented in a balanced way in Member States, which makes the follow-up of these goods difficult and an area increasingly exploited by fraudsters. In an effort to toughen up VAT exemption conditions, the Commission is proposing to compel importers to providing their VAT number when importing, as well as that of their customer in the importing Member State and to prove that the imported goods will be transferred to another Member State.
VAT fraudsters intentionally omit declaring intra-community deliveries to the tax authorities, provide incomplete or incorrect data or make late declarations. The Member State of destination is ill-informed and can barely detect fiscal losses or revenue owed it. The commission is proposing that suppliers carrying out intra-Community operations are held responsible for the loss of VAT revenue caused by its defaulting client in another Member State when the supplier has contributed to this loss by not declaring its delivery to the VAT administration or by making incomplete, incorrect or late declarations. This proposal is not appreciated by European bodies representing business interests.
The Commission action plan includes two other rafts of measures. A recasting of regulation 1798/2003 is initially planned, in connection of VAT administrative cooperation. The data contained in a VAT data base managed by another Member State, confirmation of the accuracy of information (name, address etc.) of a taxable company based on its registration, minimum standards of identification and the writing off of taxable companies, sharing of responsibilities in the protection of Member States' revenue and the creation of a EUROFISC network. Later, the VAT directive will be amended to enhance harmonization of invoicing rules (period of data storage, issuing date) and the date of VAT demands in intra-Community operations. (M.B./trans/rh)