Italian media has reported that the European Commission has rejected the nation’s
Plans to introduce a value-added tax reverse charge on the supplies of large retailers.
The plan was included in the 2015 Budget Bill, la legge di stabilita. The original Bill had
Also proposed extending the reverse charge to real estate and contribution services.
Intended to prevent fraud, the reverse charge shifts the obligation to account for VAT to the
Recipient, instead of the supplier.
As has been anticipated, the Commission reportedly said that there is insufficient evidence
That the reverse charge is necessary or that it would contribute to EU efforts to tackle fraud.
The Government will now need to find extra revenues or spending cuts worth about EUR730m
(795m), Italy budget included a safeguard clause, negotiated with the European Commission,
Which included a package of measures that will be implemented if Italy fails to reach its fiscal
Targets. In the absence of other policies, Italy will be obliged to hike the 10 percent and 22
Percent VAT rates by two percent from the beginning of 2016.
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