BETA


2022/0027(CNS) Common system of value added tax (VAT): extension of the application period of the optional reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud and of the Quick Reaction Mechanism against VAT fraud

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead ECON FERBER Markus (icon: EPP EPP) GUALMINI Elisabetta (icon: S&D S&D), CHASTEL Olivier (icon: Renew Renew), URTASUN Ernest (icon: Verts/ALE Verts/ALE), BECK Gunnar (icon: ID ID), MOŻDŻANOWSKA Andżelika Anna (icon: ECR ECR), GUSMÃO José (icon: GUE/NGL GUE/NGL)
Lead committee dossier:
Legal Basis:
TFEU 113

Events

2022/06/08
   Final act published in Official Journal
2022/06/03
   EP/CSL - Act adopted by Council after consultation of Parliament
2022/05/03
   EP - Decision by Parliament
Details

The European Parliament adopted by 605 votes to 2, with 27 abstentions, following a special legislative procedure (consultation), a legislative resolution on the proposal for a Council directive amending Directive 2006/112/EC as regards the extension of the application period of the optional reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud and of the Quick Reaction Mechanism against VAT fraud.

Parliament approved the Commission's proposal without amendments.

The proposal for a Directive amending Council Directive 2006/112/EC on the common system of value added tax (the ‘VAT Directive’) consists of extending until 31 December 2025:

1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud affecting supplies of goods and services referred to in Article 199a(1) of the VAT Directive and

2) the possibility to use the Quick Reaction Mechanism (QRM), as provided for in Article 199b of the VAT Directive, to combat fraud via the application of the reverse charge mechanism in specific cases.

Documents
2022/04/26
   EP - Committee report tabled for plenary, 1st reading/single reading
Documents
2022/04/26
   EP - Committee report tabled for plenary, 1st reading/single reading
Documents
2022/04/20
   EP - Vote in committee
2022/04/05
   EP - Committee draft report
Documents
2022/03/23
   ESC - Economic and Social Committee: opinion, report
Documents
2022/03/07
   EP - Committee referral announced in Parliament
2022/03/03
   EP - FERBER Markus (EPP) appointed as rapporteur in ECON
2022/02/10
   EC - Legislative proposal published
Details

PURPOSE: to extend the application period of the optional reverse charge mechanism for supplies of certain goods and services susceptible to fraud and of the Quick Reaction Mechanism against VAT fraud.

PROPOSED ACT: Council Directive.

ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.

BACKGROUND: tax fraud in the field of value added tax (VAT) leads to considerable budget losses and has an impact on the operation of the internal market.

Article 199a of Council Directive 2006/112/EC provides for Member States to use, on an optional basis, the reverse charge mechanism for the payment of VAT on supplies of pre-defined goods and services that are susceptible to fraud, and in particular, Missing Trader Intra-Community (MTIC) fraud.

The Quick Reaction Mechanism (QRM) special measure set out in Article 199b of that Directive offers Member States, under certain strict conditions, a faster procedure that allows for the introduction of the reverse charge mechanism, resulting in a more adequate and effective response to sudden and massive fraud.

Both Articles expire on 30 June 2022.

In order to deal with the issue of (MTIC) fraud in a more structural manner, the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022.

To allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, the Commission considers it necessary to extend the anti-fraud measures provided for in Articles 199a and 199b for a further limited period.

CONTENT: this proposal for a Directive amending Council Directive 2006/112/EC on the common system of value added tax (the VAT Directive) seeks to prolong until 31 December 2025:

(1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and;

(2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive, to combat fraud via the application of the reverse charge mechanism in very specific cases.

This seems to be a reasonable period in order to allow Council negotiations on the definitive VAT system to continue. If the definitive VAT system does not enter into force before that date, the arrangements in Article 199a of the VAT Directive might, because of the sunset clause, come to an end in 2025. If the definitive VAT system would enter into force before 2025, Articles 199a and 199b will be amended and therefore replace the current rules which are being extended.

Similarly, this extension is also linked to the development and adoption of a Commission proposal concerning VAT in the digital age, for which a date of entry into force cannot be provided at this stage. The adoption of the proposal itself by the Commission is scheduled for 2022.

Documents

Votes

Système commun de taxe sur la valeur ajoutée (TVA): prolongation de la période d’application du mécanisme d’autoliquidation facultatif aux livraisons de certains biens et prestations de certains services présentant un risque de fraude et du mécanisme de réaction rapide contre la fraude à la TVA - Common system of value added tax (VAT): extension of the application period of the optional reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud and of the Quick Reaction Mechanism against VAT fraud - Gemeinsames Mehrwertsteuersystem: Verlängerung des Anwendungszeitraums der fakultativen Umkehrung der Steuerschuldnerschaft bei Lieferungen bestimmter betrugsanfälliger Gegenstände und Dienstleistungen und des Schnellreaktionsmechanismus gegen Mehrwertsteuerbetrug - A9-0128/2022 - Markus Ferber - Proposition de la Commission #

2022/05/03 Outcome: +: 605, 0: 27, -: 2
DE FR ES IT PL NL RO BE SE PT HU AT EL CZ BG FI DK IE HR SK LT LV EE SI CY LU MT
Total
88
67
56
70
44
28
23
20
20
20
19
18
18
17
14
14
13
13
12
11
10
8
7
7
6
6
5
icon: PPE PPE
155

Hungary PPE

1

Czechia PPE

2

Denmark PPE

For (1)

1

Latvia PPE

2

Estonia PPE

For (1)

1
2

Luxembourg PPE

2

Malta PPE

For (1)

1
icon: S&D S&D
133

Greece S&D

2

Czechia S&D

For (1)

1

Slovakia S&D

2

Lithuania S&D

2

Latvia S&D

2

Estonia S&D

2

Slovenia S&D

For (1)

1

Cyprus S&D

2

Luxembourg S&D

For (1)

1
icon: Renew Renew
96

Italy Renew

2

Poland Renew

1
3

Hungary Renew

2

Austria Renew

For (1)

1

Finland Renew

3

Ireland Renew

2

Croatia Renew

For (1)

1

Lithuania Renew

1

Latvia Renew

For (1)

1

Estonia Renew

3

Slovenia Renew

2

Luxembourg Renew

2
icon: Verts/ALE Verts/ALE
65

Spain Verts/ALE

3

Poland Verts/ALE

For (1)

1

Netherlands Verts/ALE

3

Belgium Verts/ALE

3

Sweden Verts/ALE

2

Portugal Verts/ALE

1

Austria Verts/ALE

3

Czechia Verts/ALE

3

Finland Verts/ALE

3

Denmark Verts/ALE

2

Ireland Verts/ALE

2

Lithuania Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1
icon: ECR ECR
57

Germany ECR

1

Belgium ECR

2

Greece ECR

1

Bulgaria ECR

1

Croatia ECR

1

Slovakia ECR

For (1)

1

Lithuania ECR

1

Latvia ECR

2
icon: The Left The Left
35

Netherlands The Left

For (1)

1

Belgium The Left

For (1)

1

Sweden The Left

For (1)

1

Czechia The Left

1

Finland The Left

For (1)

1

Denmark The Left

1

Cyprus The Left

2
icon: NI NI
35

France NI

2

Lithuania NI

1

Latvia NI

1
icon: ID ID
58

Netherlands ID

Against (1)

1
3

Czechia ID

Against (1)

1

Finland ID

2

Denmark ID

For (1)

1

Estonia ID

For (1)

1

History

(these mark the time of scraping, not the official date of the change)

docs/0/docs/0/url
https://dmsearch.eesc.europa.eu/search/public?k=(documenttype:AC)(documentnumber:1319)(documentyear:2022)(documentlanguage:EN)
docs/2/docs/0/url
https://www.europarl.europa.eu/doceo/document/A-9-2022-0128_EN.html
docs/3
date
2022-05-03T00:00:00
docs
title: T9-0131/2022
type
Text adopted by Parliament, 1st reading/single reading
body
EP
events/3/docs/0/url
https://www.europarl.europa.eu/doceo/document/A-9-2022-0128_EN.html
events/4
date
2022-05-03T00:00:00
type
Decision by Parliament
body
EP
docs
url: https://www.europarl.europa.eu/doceo/document/TA-9-2022-0131_EN.html title: T9-0131/2022
summary
events/4
date
2022-05-03T00:00:00
type
Decision by Parliament
body
EP
docs
title: T9-0131/2022
events/6/docs
  • title: Directive 2022/890 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32022L0890
  • title: OJ L 155 08.06.2022, p. 0001 url: https://eur-lex.europa.eu/legal-content/FR/TXT/?uri=OJ:L:2022:155:TOC
procedure/final
title
Directive 2022/890
url
https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32022L0890
events/5
date
2022-06-03T00:00:00
type
Act adopted by Council after consultation of Parliament
body
EP/CSL
events/6
date
2022-06-08T00:00:00
type
Final act published in Official Journal
procedure/stage_reached
Old
Awaiting final decision
New
Procedure completed
procedure/subject/2.70.02
Indirect taxation, VAT, excise duties
docs/0
date
2022-03-23T00:00:00
docs
title: CES1319/2022
type
Economic and Social Committee: opinion, report
body
ESC
docs/2
date
2022-04-26T00:00:00
docs
title: A9-0128/2022
type
Committee report tabled for plenary, 1st reading/single reading
body
EP
docs/3
date
2022-05-03T00:00:00
docs
title: T9-0131/2022
type
Text adopted by Parliament, 1st reading/single reading
body
EP
events/0
date
2022-02-10T00:00:00
type
Legislative proposal published
body
EC
docs
summary
events/0
date
2022-02-10T00:00:00
type
Legislative proposal published
body
EC
docs
summary
events/2
date
2022-04-20T00:00:00
type
Vote in committee
body
EP
events/3
date
2022-04-26T00:00:00
type
Committee report tabled for plenary, 1st reading/single reading
body
EP
docs
title: A9-0128/2022
events/4
date
2022-05-03T00:00:00
type
Decision by Parliament
body
EP
docs
title: T9-0131/2022
forecasts
  • date: 2022-05-02T00:00:00 title: Indicative plenary sitting date
procedure/Other legal basis
Rules of Procedure EP 159
procedure/dossier_of_the_committee
  • ECON/9/08358
procedure/stage_reached
Old
Preparatory phase in Parliament
New
Awaiting final decision
procedure/subject/2.70.02
Indirect taxation, VAT, excise duties
forecasts
  • date: 2022-05-02T00:00:00 title: Indicative plenary sitting date
forecasts
  • date: 2022-05-02T00:00:00 title: Indicative plenary sitting date
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: FERBER Markus date: 2022-03-03T00:00:00 group: Group of European People's Party abbr: EPP
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: FERBER Markus date: 2022-03-03T00:00:00 group: Group of European People's Party abbr: EPP
shadows
docs/0/docs/0/url
https://www.europarl.europa.eu/doceo/document/ECON-PR-729901_EN.html
docs/0
date
2022-04-05T00:00:00
docs
title: PE729.901
type
Committee draft report
body
EP
docs/0
date
2022-02-10T00:00:00
docs
type
Legislative proposal
body
EC
committees/0/shadows/3
name
GUSMÃO José
group
The Left group in the European Parliament - GUE/NGL
abbr
GUE/NGL
committees/0/shadows/1
name
CHASTEL Olivier
group
Renew Europe group
abbr
Renew
forecasts
  • date: 2022-05-02T00:00:00 title: Indicative plenary sitting date
committees/0/shadows
  • name: GUALMINI Elisabetta group: Group of Progressive Alliance of Socialists and Democrats abbr: S&D
  • name: MOŻDŻANOWSKA Andżelika Anna group: European Conservatives and Reformists Group abbr: ECR
committees/0/rapporteur
  • name: FERBER Markus date: 2022-03-03T00:00:00 group: Group of European People's Party abbr: EPP
events/1
date
2022-03-07T00:00:00
type
Committee referral announced in Parliament
body
EP
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: PIETIKÄINEN Sirpa date: 2022-03-03T00:00:00 group: Group of European People's Party abbr: EPP
shadows
name: BECK Gunnar group: Identity and Democracy abbr: ID
committees/0/shadows
  • name: BECK Gunnar group: Identity and Democracy abbr: ID
procedure/other_consulted_institutions
European Economic and Social Committee
committees/0/rapporteur
  • name: PIETIKÄINEN Sirpa date: 2022-03-03T00:00:00 group: Group of European People's Party abbr: EPP
events/0/summary
  • PURPOSE: to extend the application period of the optional reverse charge mechanism for supplies of certain goods and services susceptible to fraud and of the Quick Reaction Mechanism against VAT fraud.
  • PROPOSED ACT: Council Directive.
  • ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.
  • BACKGROUND: tax fraud in the field of value added tax (VAT) leads to considerable budget losses and has an impact on the operation of the internal market.
  • Article 199a of Council Directive 2006/112/EC provides for Member States to use, on an optional basis, the reverse charge mechanism for the payment of VAT on supplies of pre-defined goods and services that are susceptible to fraud, and in particular, Missing Trader Intra-Community (MTIC) fraud.
  • The Quick Reaction Mechanism (QRM) special measure set out in Article 199b of that Directive offers Member States, under certain strict conditions, a faster procedure that allows for the introduction of the reverse charge mechanism, resulting in a more adequate and effective response to sudden and massive fraud.
  • Both Articles expire on 30 June 2022.
  • In order to deal with the issue of (MTIC) fraud in a more structural manner, the Commission made a proposal for the introduction of the so-called definitive VAT system, a simpler and fraud-proof system for intra-Union trade of goods. However, the state of play of the ongoing negotiations in the Council indicates that it will not be possible for the definitive VAT system to enter into force on 1 July 2022.
  • To allow the negotiations on the definitive system to continue, without putting at risk the available tools in order to combat VAT fraud, the Commission considers it necessary to extend the anti-fraud measures provided for in Articles 199a and 199b for a further limited period.
  • CONTENT: this proposal for a Directive amending Council Directive 2006/112/EC on the common system of value added tax (the VAT Directive) seeks to prolong until 31 December 2025:
  • (1) the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a(1) of the VAT Directive and;
  • (2) the possibility to use the Quick Reaction Mechanism (QRM) , as set out in Article 199b of the VAT Directive, to combat fraud via the application of the reverse charge mechanism in very specific cases.
  • This seems to be a reasonable period in order to allow Council negotiations on the definitive VAT system to continue. If the definitive VAT system does not enter into force before that date, the arrangements in Article 199a of the VAT Directive might, because of the sunset clause, come to an end in 2025. If the definitive VAT system would enter into force before 2025, Articles 199a and 199b will be amended and therefore replace the current rules which are being extended.
  • Similarly, this extension is also linked to the development and adoption of a Commission proposal concerning VAT in the digital age, for which a date of entry into force cannot be provided at this stage. The adoption of the proposal itself by the Commission is scheduled for 2022.
commission
  • body: EC dg: Taxation and Customs Union commissioner: GENTILONI Paolo