The European Parliament has just approved its position on the introduction of a reverse charge mechanism aimed at combating specific forms of VAT fraud.

Parliament's position, penned by Nationalist MEP David Casa, was approved by 506 votes in favour and 26 against.

Missing Trader Intra-Community Fraud, known in its most serious form as carousel fraud, is a criminal activity conducted by professional fraudsters. According to recent studies this could amount to staggering 24 per cent of all VAT fraud.

While the European Parliament's position supports most of what the Commission proposed, Mr Casa stated he felt it was crucial for there to be no excessively burdensome obligations placed on the business sector.

"It is also possible that such legislation will affect SMEs and at this time of economic turmoil we must ensure that we do our utmost to aid these important organisations," Mr Casa said during the debate preceding the vote on his report.

According to Mr Casa his report ensures that there will be no additional burdensome reporting obligations on the business sector as a result of the introduction of this mechanism.