The Commission has stressed the need to raise efficiency of VAT due to the great need for fiscal consolidation. As it has been estimated, VAT frauds cost the EU and national budgets several billion euro every year (a recent example is the estimated loss of EUR 5 billion between June 2008 and December 2009 in relation to the greenhouse gas emission allowance trade).
To raise efficiency of the VAT system, the EU needs to improve tax collection and tackle tax evasion. In this context, on 31 July 2012, the Commission adopted a proposal for a Quick Reaction Mechanism (QRM), which would enable Member States to face the aggressive forms of VAT frauds more rapidly and battle against fraudsters that have become quicker and cleverer.
Member States would no longer face legal difficulties to implement specific emergency measures in the event of sudden and massive VAT frauds. This is not the case in the EU VAT law that is currently in force, which renders the process slow and cumbersome.
This can lead to doubtful results, as it provokes significant delays to the Member States in taking action to stop the fraud immediately, or challenge them before the Courts in case they adopt immediate measures without an appropriate legal basis in the EU legislation.
Under the QRM, it is provided that a Member State would have the possibility, within the period of one month, to apply a "reverse charge mechanism" (the only anti-fraud measure currently specified). The latter provides that the person who is liable for VAT becomes the recipient rather than the supplier of the goods or services.
This would considerably improve Member States' chances of tackling complex fraud schemes more efficiently (e.g. carrousel frauds and missing trader fraud), and of reducing the possibility of irreparable financial losses.