EU proposes extending anti-fraud VAT reverse charges to June 2030

An extension of existing powers

Article 1 of the draft would replace the expiry dates in articles 199a(1) and 199b(6) of Council Directive 2006/112/EC on the common system of value added tax. Council Directive (EU) 2022/890 last extended both powers to 31 December 2026. The new text is a Commission proposal, so businesses cannot yet treat the June 2030 date as enacted law.^[1][3]

Article 199a allows Member States to make the taxable customer liable for VAT on specified domestic supplies. The supplier then invoices without collecting the VAT, and the customer accounts for it through its VAT return. Where the customer has full deduction rights, the output VAT can be offset by input VAT, preventing the supplier from receiving tax that it could retain fraudulently.^[1][2]

Which transactions are affected?

The eligible categories include emission allowances, mobile phones, integrated circuits, gas and electricity supplied to taxable dealers, telecommunications, game consoles and computers, cereals and industrial crops, and certain raw or semi-finished metals. The option remains national: the Directive does not impose one uniform reverse charge throughout the EU. Member States may set conditions, and reporting obligations apply to suppliers in the categories specified by article 199a(1)(c) to (j).^[2]

Article 199b is different. Its Quick Reaction Mechanism permits a temporary reverse charge for sudden and massive fraud threatening considerable, irreparable financial losses. A measure can last no more than nine months and requires notification and Commission confirmation of no objection. The proposed 2030 extension would preserve this exceptional procedure; it would not turn each national emergency measure into a four-year arrangement.^[1][2]

Planning for the transition

The Commission links the proposed extension to cross-border digital reporting under the VAT in the Digital Age package from 1 July 2030. For MNEs in affected sectors, the immediate task is to monitor adoption and each relevant national regime, while retaining transaction classifications, customer-status checks and invoice controls. The draft provides for entry into force 20 days after Official Journal publication; that remains conditional on adoption and publication.^[1]