On 12 December 2018, the Commission proposed two new measures which would help to establish better cooperation between tax authorities and Payment Service Providers such as credit card and direct debit providers.
On November 30th of 2017, the Commission proposed new rules on administrative cooperation between Member States' administrations in order to fight VAT fraud more efficiently.
These proposed measures should…
Stephen Quest, Director General for the EU's Taxation and Custom's Union department explains the proposal
VAT fraudsters operate increasingly cross border, whereby the supplies involve different Member States and even non–EU countries.
Tax administrations need to work together with their counterparts from other Member States to effectively tackle these fraud schemes and prosecute the fraudsters.
The currently available instruments for this administrative cooperation do not match the complexity and magnitude of cross-border VAT fraud.
Cooperation between Member States heavily relies on manual processing of information and there is hardly any exchange with EU enforcement bodies of intelligence on organised crime structures involved in serious VAT fraud.
In addition, there are few coordinated actions between tax administrations and law enforcement authorities at national and EU level.
Today's proposals will broaden the range of cooperation tools for Member States, enabling them to tackle VAT fraud more quickly and more efficiently, including in e-commerce.
More on the need for these new measures in the detailed MEMO
The proposed Key measures include:
The Commission proposes to put in place an online system within the EU's network of anti-fraud experts Eurofisc.
This system would enable all Member States to work together in real time and process, analyse and audit data on cross-border activities for a quick and accurate risk assessment.
Eurofisc officials could then coordinate the investigations and audits.
Opening new lines of communication and data exchange between tax authorities via Eurofisc and their European counterparts: OLAF, Europol and the newly created European Public Prosecutor Office (EPPO).
Europol and OLAF would help identify the real perpetrators of fraud.
The EPPO could prosecute the most serious cases of cross-border VAT fraud.
The scheme for importing goods free of VAT (customs procedures 42 and 63), implemented to ease suply of goods delivered to a business in another Member State, is often abused and the goods diverted to the black market without VAT being paid. To put an end to this fraud, information would be shared and cooperation strengthened between tax and customs authorities in all Member States.
In order to tackle VAT fraud on the sales of used cars, Eurofisc officials would also be given access to car registration data.
A more detailed explanation of the new measures can be found in the factsheet.
The proposed measures, which will now be submitted to the European Parliament for consultation and to the Council for adoption, follow up on the 'cornerstones' for a new definitive single EU VAT area proposed in October 2017, and the VAT Action Plan towards a single EU VAT area presented in April 2016.
This proposal also complements the VAT e-commerce package of December 2016 requiring deeper cooperation among Member States.