(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.

(2)

Council Directive 2006/112/EC (3) allows Member States to apply for a derogation from that Directive in order to prevent certain forms of tax evasion or avoidance.

(3)

Recent experience has demonstrated that the procedure provided for in Article 395 of Directive 2006/112/EC is not able to respond quickly enough to requests by Member States for urgent measures.

(4)

Experience has also shown that the designation of the recipient as the person liable for the payment of the VAT (reverse charge) is, in certain cases, an effective measure to stop VAT fraud in specific sectors.

(5)

Under the reverse charge provisions in Articles 199 and 199a of Directive 2006/112/EC, Member States do not have the flexibility to respond quickly to sudden and massive fraud in categories of goods and services falling outside the scope of those Articles. Specific arrangements therefore need to be made to address these circumstances.

(6)

Considering the massive instances of fraud that have occurred, a rapid and exceptional response to further instances of sudden fraud is best guaranteed by a Quick Reaction Mechanism ("QRM") special measure consisting of the option to apply for a short period a reverse charge, following appropriate notification by the Member State concerned. In order to ensure the exercising of the option is proportionate to the problem, the Commission, once it is in possession of the relevant information, should have a short period in which to appraise the notification and confirm whether it objects to the QRM special measure. Member States should have the opportunity for their views to be taken into account by the Commission, and should therefore be fully informed of the notification and any additional information provided throughout the process. Additionally, the Council should then decide on any further application of the reverse charge by an implementing Decision pursuant to Article 395 of Directive 2006/112/EC.

(7)

The Member State that has notified its intention to apply the QRM special measure may do so once the Commission has notified the absence of objection.

(8)

In order to provide for the further application of the reverse charge, at the earliest opportunity and before the expiry of the QRM special measure, the procedure laid down in Article 395 of Directive 2006/112/EC should be subject to a shorter deadline.

(9)

Rapid processing of Member States' notifications under the QRM will be facilitated if a standardised form is established for those notifications and for the provision of any additional information to the Commission. Implementing powers should therefore be conferred on the Commission as regards that standardised form.

(10)

Since a QRM can only be a temporary solution pending longer term legislative solutions with a view to making the VAT system more resilient to instances of VAT fraud, the QRM should only apply for a limited period of time.

(11)

In order to evaluate the effectiveness of the QRM, the Commission should prepare an overall assessment report on the impact of the mechanism in addressing instances of sudden and massive fraud.

(12)

Since the objective of the action to be taken, namely 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 that objective.

(13)

Directive 2006/112/EC should therefore be amended accordingly,

(1)

the following Article is inserted:

(*1)  Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13)."

(*2)  Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax (OJ L 268, 12.10.2010, p. 1).";"

(2)

in Article 395, the following paragraph is added: