EU rejects Italian VAT 'reverse charge'

(ANSA) - Brussels, May 22 - 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.