The EC on Friday refused an
Italian bid to extend a "reverse charge" of its VAT to large
retailers, saying it contradicts its directive on value-added
taxes.
The reverse charge, unpopular with Italian businesses,
shifts the VAT burden from the seller to the buyer of a good or
service.
A Commission spokesperson said it found there was
"insufficient proof that the requested measure would help combat
fraud".
It also warned that the "procedure of 'reverse charge'
should not be used systematically to mask inadequate
surveillance by the tax authorities of a State".
The measure was worth about 700 million in the 2015 budget.
Meanwhile, Italy's economy ministry said Friday that the EC
rejection of its reverse-charge VAT will not trigger an increase
in fuel taxes.
"There is a firm commitment of the government to not
trigger the safeguard clauses," in the budget, said the
ministry.
The 2015 budget contained such clauses as potential sources
of replacement funding.
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