4 September 2018
Keeping EU energy and emissions markets protected from VAT fraud beyond 2018
Missing Trader Intra-Community Value Added Tax fraud remains a persistent threat to the integrity and well-functioning of electricity, gas and emission allowance markets in Europe1. Billions of euros had been defrauded from European Exchequers before the Council of the EU decided on the introduction of a derogation from the VAT Directive2 for electricity, gas and emission allowance transactions. The derogation enables Member States to apply the Domestic Reverse Charge Mechanism (DRCM) to these goods and services. Should the existing derogation not be proactively prolonged by the Council before the end of the year, it will automatically expire at midnight on 31 December 2018 as stipulated in the built-in sunset clause in Article 199a3 of the VAT Directive.
