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Under
the generalised reverse charge system, the VAT system
which is currently applicable to intra-community supplies
would also apply to domestic transactions, which means the
customer, rather than the vendor, would be responsible for
paying the VAT to the Treasury.
Both
the introduction of VAT for intra-community supplies and
the generalised reverse charge have the potential to
considerably reduce the phenomenon of 'missing trader' (MTIC)
fraud.
EC
has insisted the possible introduction of a generalised
reverse charge system could only work effectively if
applied uniformly across all member states and has said it
is not opposed to a pilot project by a willing member
state.
Source
: Accountancy Age - London, UK, dated
25/02/2008
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