Bloomberg News

EU Finance Ministers Expected to Approve Anti-VAT-Fraud Rules

June 13, 2013

European Union finance ministers are expected to sign off next week on regulations to combat fraud related to value-added taxes after nations reached agreement in Brussels yesterday, an EU official said.

Governments ironed out a deal on how and when to allow reverse charges on VAT, a consumption tax usually paid by purchasers, the official said. Fraud is a particular concern for mobile phones, tablet computers, gas, electricity and cereals and other industrial crops.

EU leaders called on finance ministers to adopt the anti-VAT-fraud measures “by the end of June 2013 at the latest” as part of a 10-point plan to crack down on tax avoidance. A U.K.- backed compromise aimed to overcome an impasse on who makes decisions on taking action when fraud is suspected.

The anti-fraud proposal has two elements: a “quick reaction mechanism” to address new cases; and a “reverse charges mechanism” that can change the way the tax is collected. The final compromise builds on a proposal from the U.K. and will allow nations to act after a one-month review by the European Commission, under the condition that the reverse charges gain unanimous support from all EU countries within nine months.

The agreement means finance ministers may sign off on the plan without further debate when they meet on June 21 in Luxembourg. Ireland, which holds the EU’s rotating administrative presidency, looks forward to presenting the package for approval, said a spokesperson who asked not to be named in line with government policy.

To contact the reporter on this story: Rebecca Christie in Brussels at

To contact the editor responsible for this story: James Hertling at

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