REPORT on the proposal for a Council directive amending Directive 2006/112/EC on the common system of value added tax as regards a quick reaction mechanism against VAT fraud

Text proposed by the Commission

Amendment

(-1) The enhanced fight against tax fraud and evasion is key to restoring and maintaining the stability and strength of public finances across the Union.

Text proposed by the Commission

Amendment

(1) Tax fraud in the field of value added tax (VAT) leads to considerable budget losses and affects the conditions of competition and thus the operation of the internal market. Specific sudden and massive forms of tax fraud have recently developed especially via the use of electronic means which facilitate rapid illegitimate trade on a large scale.

(1) Tax fraud in the field of value added tax (VAT) results in considerable losses to public finances and negatively affects the conditions of competition and thus the fair and efficient operation of the internal market. Such losses should be curbed, even more so during times of fiscal austerity. Specific sudden and massive forms of tax fraud have recently developed especially via the use of electronic means which facilitate rapid illegitimate trade on a large scale that often extends beyond the borders of a particular Member State.

Text proposed by the Commission

Amendment

(2) Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax allows Member States to apply for a derogation from that Directive in order to prevent certain forms of tax evasion or avoidance. Authorisation of such derogation requires a proposal from the Commission and its adoption by the Council. Recent experience has demonstrated that the process for granting derogations is not always flexible enough to ensure a prompt and suitable reaction to requests by Member States.

(2) Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax allows Member States to apply for a derogation from that Directive in order to prevent certain forms of tax evasion or avoidance. Authorisation of such derogation requires a proposal from the Commission and its adoption by the Council. Recent experience has demonstrated that the process for granting derogations is not always quick or flexible enough to ensure a prompt and suitable reaction to requests by Member States.

Text proposed by the Commission

Amendment

(7) The designation of the recipient as person liable for the payment of the VAT (reverse charge) is an effective measure to stop at once the most well-known types of tax evasion in certain sectors. However, as the situation may evolve over time, it may also be necessary to allow for other measures. To that end, the Council should, where appropriate, upon proposal of the Commission, determine any other measure as falling within the scope of the Quick Reaction Mechanism. The type of measures that could be authorised should be established in order to minimise the time necessary for the authorisation of the derogations by the Commission.

(7) The designation of the recipient as person liable for the payment of the VAT ("reverse-charge mechanism") is an effective measure to stop at once the most well-known types of tax evasion in certain sectors ("caroussel fraud"). However, given the existing weaknesses of the VAT system, and depending on how the situation may evolve over time, it may also be necessary to allow for other measures. To that end, the Commission should, where appropriate, propose any other measure as falling within the scope of the quick reaction mechanism. That measure should be approved unanimously by the Council after consulting the European Parliament. The type of measures that could be authorised should be thoroughly and transparently established in order to minimise the time necessary for the authorisation of the derogations by the Commission.

Text proposed by the Commission

Amendment

(9a) In order to develop and improve the quick reaction mechanism on an ongoing basis, the Commission should report regularly to the European Parliament and to the Council on its application, examining, inter alia, other measures to be added to the scope of the mechanism and new ways to strengthen cooperation between Member States in the general framework of the mechanism.

Text proposed by the Commission

Amendment

(9b) In order for the quick reaction mechanism to function in a satisfactory way, the Commission should, at all times, be capable of acting swiftly and accurately on these matters. The human and other resources of the quick reaction mechanism should therefore be adequate and an accelerated internal decision-making procedure should be established and maintained.

Text proposed by the Commission

Amendment

(9c) Since the application of a special measure in one Member State could have repercussions on the VAT systems of the other Member States, the Commission should, in order to maintain transparency, inform all Member States about all requests made and all decisions taken pursuant thereto.

Text proposed by the Commission

Amendment

(9d) In its work on enhancing and fine-tuning the quick reaction mechanism, the Commission should consult extensively with undertakings in fraud-prone sectors and with other relevant stakeholders.

Text proposed by the Commission

Amendment

(10) Since the objective of the action to be taken, to address sudden and massive fraud phenomena in the field of VAT which very often have an international dimension, cannot be sufficiently achieved by the Member States, as they are not in a position to individually counter the fraud circuits related to new forms of trade which involve several countries at the same time, and can therefore, by reason of ensuring a quicker and, as a result, a more adequate and effective response to these phenomena, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.

(10) Since the objective of the action to be taken, to address sudden and massive fraud phenomena in the field of VAT which very often have an international dimension, cannot be sufficiently achieved by the Member States, as they are not in a position to individually counter the fraud circuits related to new forms of trade which involve several countries at the same time, and can therefore, by reason of ensuring a quicker and, as a result, a more adequate and effective response to these phenomena, be better achieved at Union level, the Union should adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.

Text proposed by the Commission

Amendment

Article 1a

By 1 January 2014, the Commission shall present a report on how the regular derogation procedure set out in Article 395 of Directive 2006/112/EC could be accelerated. The aim of the report shall be to identify changes to existing structures and routines that would ensure that the Commission always completes the procedure within five months of receipt of an application from a Member State. The report shall, if appropriate, be accompanied by legislative proposals.

Text proposed by the Commission

Amendment

2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.

2. Member States shall communicate to the European Parliament and to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.

Text proposed by the Commission

Amendment

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall be consolidated with the Directive which it amends within three months of its entry into force.