VAT reverse-charge mechanism

This own-initiative report (INI) examines the VAT reverse-charge mechanism, which shifts the obligation to account for VAT from the supplier to the customer. The amendments highlight the scale of missing trader intra-Community and carousel fraud, with estimated losses of EUR 12.5 to 32.8 billion per year and an EU VAT compliance gap of EUR 128 billion. They stress the mechanism's effectiveness in high-risk sectors while warning that fraud can move to adjacent sectors, note divergent national applications that create legal uncertainty and compliance costs, especially for SMEs, and warn that the expiry of Articles 199a and 199b of the VAT Directive would create a legal vacuum. Others call for progress towards a definitive VAT system, question the never-applied quick reaction mechanism, and discuss moving from unanimity to qualified majority voting on certain tax matters.