Press Room
Europe's fight against VAT fraud will face difficulties
Leading business and financial advisers, Grant Thornton welcomes
Wednesday's vote in the EU Parliament on measures intended to
combat VAT fraud. The problem of Missing Trader Intra-Community
(MTIC) fraud, also referred to as 'Carousel' fraud, has plagued the
EU for over a decade and has cost the EU Member States billions in
lost revenues. "The measures will introduce a mechanism whereby the
purchaser of certain goods or services will be required to account
for the VAT due under a system known as the reverse charge. The
intention is that this will stop the rogue suppliers of these goods
and services from disappearing without having paid VAT to the tax
authorities," says Lorraine Parkin, Head of VAT at Grant
Thornton.
"However, unfortunately, the measure does not go far enough and
I fear that the criminals will merely move on to dealing in other
goods or services. In addition, the Member States have been unable
to agree that the measure will be compulsory in all EU countries
and it will only apply to a limited range of goods and services,
including tradable emission allowances. In our view, the measure
should be compulsory across all EU countries and should apply to
many more goods and services. Otherwise, the fraudsters will simply
move on to a less onerous jurisdiction and into goods and services
not covered by the new rules." continues Parkin. In another vote
which also took place on Wednesday, the EU also agreed to augment
the existing Mutual Assistance regime which allows Member States to
seek the co-operation of their EU partners to collect outstanding
taxes from taxpayers who have moved from one jurisdiction to
another. "This move is laudable. For far too long, it has been too
easy for taxpayers to avoid their tax liabilities by simply moving
to another country. The standardisation of procedures and the
ability of a tax authority in one Member State to actively engage
in the pursuit of debtors in another must, in the current economic
climate, be a welcome development," concludes Parkin.
ENDS
For further information please contact: Suvra Datta, PR Manager,
0207 728 3275 and suvra.datta@gtuk.com