European Union Adopts New Rules for Value Added Tax Enforcement Cooperation

The European Commission adopted new measures to combat value added tax (VAT) fraud on October 7, 2003. The regulation is designed to stimulate more extensive exchange of information between member states by providing more binding rules governing such an exchange and to facilitate direct contact between anti-fraud agencies of the member states. The move comes as levels of fraud have reached 10% of VAT receipts in some states, which is especially troubling because VAT revenues go directly to the Union?s budget. The amendment to procedure will enable EU authorities to recover taxes on insurance premiums paid to foreign companies.