Combating tax fraud

On 25 June 2009, the Council adopted a directive intended to strengthen measures against the evasion of VAT on imports. The new act specifies the conditions under which the importation of goods is exempt from VAT if followed by a supply or transfer of those goods to a taxable person in another member state. The exemption applies only if the importer has provided the following information to the competent authorities of the member state of importation:

• the VAT identification number of the importer issued in the member state of importation
• the VAT identification number of the customer, to whom the goods are supplied, issued in another member state, or his own VAT identification number issued in the member state in which the dispatch or transport of the goods ends
• the evidence that the imported goods are intended to be transported or dispatched from the member state of importation to another member state.

On 16 December 2008, the Council adopted a Directive and a Regulation to speed up the collection and exchange of information on intra-community transactions from 2010 onwards. FEE has contributed to the discussions during the preparatory process with a comment letter on the related proposals of the European Commission.
On 1 December 2008, the European Commission adopted

• a proposal to amend the VAT Directive in two specific areas: (i) harmonise the conditions for the importer to benefit from the exemption of VAT on imports (adopted by Council on 25 June 2009, see above) and (ii) make the supplier in intra-community transactions liable for the VAT loss created by his missing customer in another Member State when he contributed to the loss by not (or late or incomplete) reporting;
• a communication setting out a short term action plan.

Regarding more far-reaching measures, the European Commission has presented a Communication in February 2008, analysing the taxation of intra-community transactions and the introduction of the option of a general reverse charge system.
 VAT exemption for import: Council Directive

Related links:

Far reaching measures: Communication on measures to change the VAT system to fight fraud
Collection and exchange of information on intra-community transactions: Council Regulation
Collection and exchange of information on intra-community transactions: Council Directive
VAT exemption for import and liability for intra-community transactions: Proposal for a Directive