This Thursday 30 November, the European Commission will propose to reinforce cooperation between the tax administrations to step up the fight against value-added tax (VAT) fraud and fraud against the CP 42 customs regime. Here are the main provisions of the regulation, of which EUROPE has had sight.
Fraud against CP 42. In 2015, there were transactions worth a total of €74 billion concerning imports from outside the EU under the customs regime CP 42. This regime provides that when a good comes into the EU via a member state which is not the final destination of the product, it is not taxed.
The customs services of the member state of arrival are required to warn their counterparts in the destination member state that a good on which VAT remains due is coming into their territory. Some of these goods end up on the black market.
The Commission therefore intends that from 2020 onwards, the exchange of information is reinforced between the member state of arrival and of destination. The Commission also hopes that the measures will help to identify cases in which the value of the item is under-estimated, in order to pay less VAT on the product.
VAT fraud on second-hand cars. Another type of fraud the Commission is hoping to stamp out concerns the sale of second-hand cars. New cars are subject to VAT in the country of registration for the whole of their value, whilst second-hand cars are subject to VAT only on the margin. It is possible to commit fraud by exploiting the difference between the two schemes. The Commission's idea, therefore, is to provide access to registers of vehicles.
Joint audits. The Commission wishes to allow inspectors from two or more national administrations to put together a single audit team to examine cross-border transactions by individuals and businesses.
For legal or natural persons who are taxpayers, when at least two other member states in addition to the country in which the person is established consider that an administrative investigation is necessary into the amounts declared and are taxable on their territory, the country in which the taxpayer is established must open the investigation, with the assistance of the two other European countries concerned.
Reinforcing Eurofisc. The Commission wishes to provide the Eurofisc system with software it is currently developing on the exchange of information ('transaction network analysis').
This early detection system for suspect transactions was launched at European level in September, under Belgian coordination. The participation of the member states in this system remains voluntary, but those not participating will still have to give their peers access to their VIES (VAT Information Exchange System) data, if a search is carried out using the VIES tool, the data are taken from national VAT databases.
Eurofisc will, moreover, be responsible for coordinating the investigation carried out by more than one-member state on the basis of its risk analyses.
The proposal, to be presented on Thursday, also aims to give Eurofisc powers to transfer data to Europol and the future European Public Prosecutor's Office. (Original version in French by Élodie Lamer)