Brussels, 12/02/2014 (Agence Europe) - In two reports adopted on Wednesday 12 February on the collection and inspection of VAT and the state of administrative cooperation between member states to tackle VAT fraud, the European Commission discusses persistent problems in the two domains and sets out a number of possible solutions.
In the report on VAT collection and inspections, the Commission says the member states must update their VAT offices to claw back some of the lost income, which totalled €193 billion or 1.5% of GDP for the EU member states (not including Cyrus or Croatia) in 2011. Improvements are required in the quality of information for identifying, registering and removing people and companies registered for VAT and also in administrative follow-up of VAT returns and payments (automatic reminders and immediate estimates of VAT due if VAT returns are not filed). Other recommended improvements focus on the new member states and cover VAT collection and recovery (writing off arrears that are difficult to recover), auditing and investigations (scrapping some compulsory audits and making greater use of computerised auditing), dispute settlement (independent compulsory procedure and reducing the number of unnecessary disputes) and improving the use of information from third parties.
In the report on administrative cooperation, the Commission calls for more work on cross-border cooperation (speedier responses to requests and better supply of information). It recommends joint investigations and multilateral enquiries, administrative cooperation with countries outside the EU, greater resources for investigations and enquiries and the spread of automatic exchange of information among the member states. The two reports are part of the Tax Fraud Action Plan launched by the Commission in December 2012 (see EUROPE 10746). (FG/transl.fl)