RD270 - ETNO Reflection Document on the Consultation Paper “Possible introduction of an optional reverse charge mechanism for VAT – Impact on businesses”

ETNO finds it is the responsibility of fiscal and law enforcement authorities to tackle VAT fraud. This responsibility should not be placed on businesses, while we furthermore consider the proposals will not effectively tackle the problem. They will create unforeseeable, substantial administrative costs for businesses that we demonstrate running into many millions of Euros for just one operator. This equally runs counter to the overall objective of reducing burdens on businesses as established in the Lisbon Strategy.

• These new rules constitute a further step away from the “definitive VAT-system” without making progress towards the “definitive system”.
• It is the responsibility of fiscal and law enforcement authorities to tackle VAT fraud: the responsibility should not be placed on businesses.
• The proposals will create unforeseeable but substantial administrative costs for businesses (running into many millions of Euros). This runs counter to the overall objective of reducing burdens on businesses as established in the Lisbon Strategy.
• ETNO does not consider that the proposals will effectively tackle VAT fraud, and in fact believes that they may make the situation worse.
• Any possible pilot project in a Member State must have specific identified and measurable goals at the outset which are communicated to all interested parties. The success of any project should be measured against fraud identified and prevented and the results fully published.