During the Ecofin Council meeting in mid-January, EU Ministers of Finance notably discussed VAT fraud. The discussion took place at the request of Czech Republic, which emphasised the need to transcend the current focus on corporate tax and pay more attention to VAT fraud. The Czechs maintain that the reverse-change mechanism is the best way of addressing VAT fraud, and with this in mind inquired about the possibility of conducting a pilot study to assess the pros and cons of such a scheme and that could be used for a future definitive VAT system. The European Commission stated for the occasion that it is not in principle opposed to a reverse charge mechanism, and several Member States expressed their support for a pilot study. In terms of next steps, the Finance Ministers are likely to further discuss VAT fraud in April, following the publication of the European Commission’s VAT Action Plan currently anticipated for 8 March.

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