01 Oct 2009 09:10:03
EC targets carbon trading fraud
Fraud in carbon trading systems is being targeted by a new campaign from the European Commission.
The organisation has unveiled changes to the European Union's VAT system in order to help reduce the chances of carbon offsetting fraud.
As the Copenhagen climate change conference is fast approaching, the commission is keen to solve the problem as soon as possible.
In the UK, France and Holland, alterations have already been made to cut carbon trading illegalities by removing VAT and a reverse charge mechanism making VAT for carbon trading unnecessary.
Laszlo Kovacs, the European commissioner for taxation and customs, said that there should be consistent policy on the issue across the continent.
He commented: "VAT carousel fraud is against member states' finances and they should have the means to combat it efficiently.
"Very recently, several member states have been confronted with carousel fraud related to greenhouse-gas emission allowances
the very high mobility of these allowances and the very high amounts at stake are an important element."
Carbon trading fraud works in a similar way to mobile phone fraud, with credits being bought from other countries VAT-free and sold with the tax added on elsewhere.http://tinyurl.com/yamlel7