European Energy Groups Urge VAT Fraud Prevention Tool Extension

The EU should extend and expand implementation of an effective VAT fraud prevention tool beyond its current expiration date at the end of the year, energy companies said Tuesday.

In a public letter, the companies extolled the effectiveness of the Domestic Reverse Charge Mechanism in cracking down on fraud in wholesale emissions and energy trading by shifting the value-added tax collection obligation from the supplier to the buyer.

The DRCM was introduced for emission allowance trading in 2011 and for electricity and gas trading and energy certificate transfers in 2013, following an outbreak of so-called carousel fraud, exploitation of ...