The EU rejects the reverse charge on VAT: ‘hole’ in the budget to 728 million – BBC

brussels. The measure would have affected the tax on large retail

Milan , May 22, 2015 – 18:25

     
     
 

The European Commission today announced the rejection of the reverse charge on VAT introduced by Government with the law of 2015. The stability is according to a statement of the EU Executive.

Note

“The Commission has adopted a Communication to the Council rejects the Italian request for an exemption (to EU legislation on VAT) to introduce the reverse charge for supplies to major retailers, “he said in a statement of the spokesman of the European Commission for financial services, Vanessa Mock. “For the Commission, there is enough evidence that the requested measure would help to combat fraud. The Commission believes that this measure entails serious risks of fraud to the detriment of the industry in retail sales to the detriment of other Member States, “the statement added.

Failing

The rejection of the EU to the reverse charge mechanism creates a” hole “of 728 million euro which, as envisaged by the safeguard clause, it should be in theory covered by the increase in excise duty on petrol from June. Fears of the stop by the EU to reverse charge VAT, which the law of stability in 2015 were extended to various sectors of retail, are reflected in the decision of the European Commission. Another provision in the balance, the split payment (ie the Italian request to separate payments of VAT from the public), is still under review by the EU. Its eventual failure would cost more than EUR 998 million, for a total of about 1.7 billion. The shortfall should be covered in theory with the automatic increase in excise duties on fuels, which will take effect from 30 June. However, according to the Ministry of Economy, “There is a firm commitment of the government to not trigger the safeguard clauses.”

What is

But in that What is the reverse charge? Introduced by the law of stability, the reverse charge mechanism applies different VAT application extending it to supermarkets and eliminating the possibility of deduction. It is, as he says precisely the English expression, of a reverse charge and determined that the recipient of a supply of goods or services, if the taxable person in the State, has to pay the tax instead of the supplier . The latter receives from the customer so the amount of the asset sold or services rendered, in order to be exempted from paying the VAT transaction executed. In fact the purpose of the rule is to prevent evasion of VAT, as the transferor does not run the risk of “forgetting” the payment of VAT and the seller can not “forget” to write down the VAT because otherwise nothing would be recording. For industrialists, such a mechanism would penalize in particular the mass distribution and therefore suggest that the threshold should be increased to compensate for the VAT credits of up to EUR 1 million and should be secured sufficient funds for redemptions. At this point, however, the problem will not arise.

May 22, 2015 | 18:25

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