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VAT - Optional reverse charge mechanism

what is vat reverse charge

In the context of the recent discussions on a co-ordinated strategy in the fight against VAT fraud a debate has been launched by a number of Member States on the possibility to change the VAT system substantially in order to combat VAT fraud. One of the options discussed is the possible introduction of an optional reverse charge mechanism .

On 14 August 2007 the European Commission launched a public consultation on this issue with the objective to ascertain the views and opinions of businesses on additional costs and/or benefits which the possible introduction of an optional reverse charge mechanism might cause for them.

The consultation is based on a study assessing the expected impact of such an option on businesses. The final report of this study together with some more information can be found here:

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Commission hopes to obtain a set of reactions and contributions concerning the issues raised by the study. Among others, the contributions made by all the interested parties will contribute to the further considerations of the Commission.

The consultation document is of particular interest to all businesses. regardless of size or branch of industry, since all economic operators might be affected by a reverse charge system.

However, the consultation document should not be interpreted as a commitment by the Commission to any initiative in this area.

Interested parties are invited to submit their comments by 15 October 2007 at the latest.

Comments may be sent by letter, fax or electronic mail for the attention of Ms Petra Spaniol.


European Commission

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Directorate General for Taxation and Customs Union

Administrative Cooperation and Fight against Fraud

Category: Bank

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