The fight against carousel fraud gets a welcome boost
June 6, 2007 12:00 AM
Commenting on the Ecofin Council's agreement on a Value Added Tax (VAT) package, ALDE MEP and Rapporteur for the report on fiscal fraud Sharon Bowles (UK, Liberal Democrats) said
"Tax fraud costs the EU an estimated €250 billion. Much of this is in the form of so called VAT 'carousel fraud'. Put in perspective, this is a sum that is several times the spending on the Common Agricultural Policy.
ECOFIN have now given the go ahead for the Commission to examine a 'country of origin' VAT system which would close the loophole of exploiting the VAT exemption for cross border supply of goods.
¨"This is good news, - says Sharon Bowles - The Parliament supported the reverse charge approach in the past but it was totally blocked by Council. With modern technology it should be possible to have a clearing system between Member States for any outstanding balances owed by one country to another.
"Recently I gave evidence to the UK House of Lords enquiry into VAT fraud, and their Report published on 25 May has also reached the conclusion that a country of origin approach is the way forward", - added MEP Sharon Bowles.
Ends
Notes
With regard to the ambitious measures envisaged by the Commission in its communication of May 2006, the Ecofin Council limited itself to calling, by the end of 2007, for an analysis of the impact for the EU of putting in place a reverse charge mechanism for VAT. It is proposed there should be a threshold of €5000 and rate of 15%. However, about one half of member states continue to have reservations about this system which could require a unanimous vote for it to become law. Nevertheless this is a significant move for several states.
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