European Union Proposes Extending VAT Anti-Fraud Measures Until 2030
On October 1, 2026, the European Commission put forward a proposal to amend Directive 2006/112/EC to extend two VAT anti-fraud tools: the optional reverse charge mechanism (RCM) for fraud-prone goods and services and the quick reaction mechanism (QRM). According to the proposal, these tools would remain available until June 30, 2030.
The proposal responds to calls from Member States, businesses, and the European Parliament. VAT fraud continues to cost EU countries public money, and both measures, which are used mainly against missing trader fraud, give Member States more time to act quickly while the long-term reform of the EU VAT system is completed.
How the Two Mechanisms Work
- Reverse Charge Mechanism (RCM): In a number of pre-defined fraud-sensitive sectors, Member States may shift the obligation to pay VAT from the seller to the buyer, which makes certain types of fraud considerably more difficult.
- Quick Reaction Mechanism (QRM): Subject to strict conditions, Member States may temporarily apply the reverse charge in other sectors where sudden and massive fraud is detected.
Bridging the Gap to ViDA
The proposed end date is aligned with the VAT in the Digital Age (ViDA) package, under which the central VIES system is scheduled to become operational on July 1, 2030. Central VIES is designed to strengthen cross-border digital reporting and taxpayer identification, supporting the fight against Missing Trader Intra-Community (MTIC) fraud. Until that infrastructure is in place, the Commission considers it necessary for Member States to retain the option of applying the RCM and QRM.
For the extension to take effect, the Council of the European Union must adopt the proposal before the end of 2026, before the existing mechanisms expire on December 31, 2026.
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