On 21 June 2013 the Council reached political agreement on a package of measures aimed at enabling member states to better combat VAT fraud.
The political agreement is the first step towards adoption in the coming weeks. The measures will be based on two directives, the quick reaction mechanism and the reverse charge mechanism. The main features of the Council's agreement are as follows:
– The "quick reaction mechanism" will only apply until 31 December 2018. Any renewal would require a proposal from the Commission and the unanimous approval of the Council;
– When a member state wishes to introduce a specific measure under the "quick reaction mechanism", the Commission will have a short period in which to confirm whether it objects, taking into account the views of other member states.
– The "reverse charge mechanism" will potentially apply to the following sectors: mobile phones, integrated circuit devices, supplies of gas and electricity, telecoms services, game consoles, tablet PCs and laptops, cereals and industrial crops and raw and semi-finished metals;
– The two mechanisms will be temporary and exceptional, and their timeframe will be aligned (i.e. until the end of 2018);
– The Commission will prioritise work on a new VAT system, as outlined in December 2011 in a communication on the future of VAT, with a view to facilitating the prevention of fraud rather than relying on solutions based on derogations.
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