EU proposes extending optional VAT reverse charge to July 2030 ViDA

The 1 October 2026 proposal would extend Articles 199a and 199b of the EU VAT Directive without changing their scope. The measures are designed to combat VAT fraud, particularly Missing Trader Intra-Community (MTIC), or carousel, fraud.

The proposed new expiry date falls immediately before the EU’s VAT in the Digital Age (ViDA) cross-border Digital Reporting Requirements take effect on 1 July 2030.

EU Member States back reverse charge against VAT fraud

Under the reverse charge mechanism, VAT liability moves from the supplier to the business customer. The supplier does not collect VAT, removing the opportunity for a fraudulent trader to collect the tax and disappear without paying it to the tax authority.

Article 199a allows Member States to apply this mechanism to specified fraud-sensitive goods and services.

Almost all EU Member States currently use Article 199a for at least one category of transaction. In a 2026 Commission consultation, 24 Member States said the mechanism had proved useful in combating VAT fraud.

Emissions allowance trading is the most widely covered category, followed by areas including mobile phones, computers, integrated circuits, gas and electricity and certain metals.

Quick Reaction Mechanism extended too

The Commission is also proposing to extend the Quick Reaction Mechanism under Article 199b until June 2030.

The QRM enables a Member State facing sudden and massive VAT fraud to introduce a temporary reverse charge rapidly in sectors not already covered by Article 199a.

Although the mechanism has never been used, 18 Member States told the Commission that it should be retained in its current or a similar form.

Reverse charge bridges the gap to ViDA digital reporting

ViDA has effectively replaced them as the next major stage of EU VAT anti-fraud reform.

From 1 July 2030, ViDA introduces near real-time Digital Reporting Requirements for intra-EU B2B transactions, supported by structured electronic invoicing and a new central VIES system. Tax authorities will gain transaction-level data that can be cross-checked to identify potential MTIC fraud.

EU VAT General and Domestic Reverse Charge rules by country

In addition to the optional Article 199a measures, EU countries use reverse charge in several other circumstances.

The two common forms are:

1. General Reverse Charge: typically where a non-resident business makes domestic supplies to a VAT-registered customer and the Member State has implemented the optional provision under Article 194 of the EU VAT Directive.
2. Domestic Reverse Charge: applying to specified transactions considered particularly susceptible to VAT fraud, including construction, scrap metal, mobile phones, energy and emissions allowances.

EU VAT General and Domestic Reverse Charge rule by country

Further local rules concerning the VAT status of both supplier and customer must always be considered when determining whether reverse charge applies.

Death of the VAT Return – reverse charge part of global trend

The use of the reverse charge is part of the wider shift towards the death of the VAT return, including pre-filled VAT returns and e-invoicing. VAT Calc’s in real-time global Calculator and Auditor  services produce instant and accurate tax calculations including the Reverse Charge in all scenarios into your ERP, billing, e-commerce or e-invoicing systems.