EU Extends VAT Reverse Charge and Quick Reaction Mechanisms

On June 3, 2022, Council Directive (EU) 2022/890 was published, amending the Directive 2006/112/EC in regard to the extension of the application period of the optional reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud and of the Quick Reaction Mechanism against VAT fraud.

Particularly, the Directive extends:

1. the possibility for Member States to apply the reverse charge mechanism to combat existing fraud in supplies of goods and services included in Article 199a of the VAT Directive; and
2. the possibility to use the Quick Reaction Mechanism (QRM), as set out in Article 199b of the VAT Directive, to combat fraud via the application of the reverse charge mechanism in very specific cases.

The application period of both Articles 199a and 199b was previously scheduled to expire on 30 June 2022 and is now extended to 31 December 2026.