(May 5, 2015) 

In yesterday’s Quick News we already included a link to a press release that was published on the website of the Austrian Ministry of Finance in this respect. Unfortunately the press release issued by the Austrian Ministry of Finance on May 4, 2015 was in German. Today the Austrian Ministry of Finance published an English version of the press release, titled: “Only by working together can we be effective against tax fraud”. Today also the Hungarian Ministry for National Economy issued a press release on the same matter, titled: “Five CEE countries propose common strategy against VAT fraud”. Below we provide you with the integral texts of the press releases as issued by the Austrian Ministry of Finance and the Hungarian Ministry for National Economy.

 

The press release as issued by the Austrian Ministry of Finance 

 

“Only by working together can we be effective against tax fraud”

 

Working meeting between five ministers of finance on the topic of “cross-border tax fraud”

Austrian Minister of Finance Hans Jörg Schelling and four other ministers of finance, Andrej Babiš (Czech Republic), Peter Kazimir (Slovakia), Vladislav Goranov (Bulgaria) and Mihály Varga (Hungary), presented the results of their working meeting today at a press conference in the Austrian Ministry of Finance in Vienna.

 

The working meeting was also attended by German State Secretary Michael Meister and focused on the start of an EU-wide initiative by the Austrian and Czech ministers of finance against cross-border tax fraud, in particular value-added tax fraud. “We all agree that the system as it is today is no longer effective. Authority must be transferred to the member states so they can make their own decision whether and how a reverse charge procedure can be implemented”, stated Minister of Finance Schelling.

 

We would like the European Commission to make a decision quickly, as moving forward from announcements to results is important to us. Each country can make its own decision whether to join the initiative. Clarifying the question of authority is important at the moment”, continued the Austrian Minister of Finance. Authority for matters concerning the value-added tax system currently lies at the EU level, and is anchored in Article 395 of the Value-Added Tax Directive. The initiative, which Schelling and the other ministers of finance aim to introduce by June, is intended to change this. “We have already indicated to the Commission that Austria and the Czech Republic might also be available as pilot countries. We could implement this during a period of 24 months and gather valuable experience”, explained Schelling.

 

The ministers of finance all agreed that the problem of value-added tax fraud can only be solved by working together. “A great deal of money is involved that we urgently need in these times of high sovereign debt”, concluded Slovakian Minister of Finance Peter Kazimir.

 

The press release as issued by the Hungarian Ministry for National Economy

 

Five CEE countries propose common strategy against VAT fraud

 

Five countries from Central and Eastern Europe are urging joint action, such as the extension of the reverse-charge VAT mechanism, Minister for National Economy Mihály Varga told MTI in a telephone interview from Vienna, where the Czech, Slovak, Austrian and Bulgarian finance ministers held a conference on combating VAT fraud.

 

As the Minister pointed out, VAT evasion and fraud cause huge problems in the region. The so-called “carousel-fraud” and “missing trader fraud” schemes are uniform practices within the entire EU, as there are no inner borders and fraudsters can easily make money by transporting goods between countries.

 

In Hungary, the loss in fiscal revenues due to VAT fraud is estimated at EUR 1.5-2bn per year, he said. The main objective of the conference was, he added, to promote common action based on mutual agreement and to introduce reverse-charge VAT.

 

As he stressed, this mechanism had already been introduced in Hungary for cereals, and that has made the sector substantially more transparent and the measure has resulted in higher fiscal revenues. However, last year the European Commission blocked the introduction of reverse-charge VAT on sugar and related products.

 

There are some differences in standpoints of individual countries, as for example the Czech and Bulgarian proposal recommends reverse-charge VAT to be applied for certain types of goods above a given value limit, either EUR 5000 or EUR 10 000.

 

Mihály Varga emphasised that reverse-charge VAT could work well in the region and tax fraud involving cross-border transports could be more effectively spotted.

 

Negotiations will be continued at several forums, and participants “want to persuade the authorities in Brussels to make a decision.”

 

Any other country can join the initiative, Mihály Varga said. German representatives also participated at the meeting as observers, although they favour a sectoral mechanism instead of a reverse charge VAT for every product.

 

The press release as issued by the Austrian Ministry of Finance also contains a link to a video of a press conference given by the five Ministers of Finance. Click here to be forwarded to the video of the press conference as available on the website of the Austrian Ministry of Finance.

 

 

Copyright – internationaltaxplaza.info

 

Follow International Tax Plaza on Twitter (@IntTaxPlaza)

 

and

 

Stay informed: Subscribe to International Tax Plaza’s Newsletter!

 

 

Submit to FacebookSubmit to TwitterSubmit to LinkedIn
INTERESTING ARTICLES