Member States are expected to reach political agreement (‘general approach’) at the Economic and Financial Affairs Council (Ecofin) on 8 November on the proposals for a Regulation and Directive presented by the Commission in December 2018 to better combat VAT fraud in the e-commerce sector (see EUROPE 12158/29).
The proposed new rules establish quarterly information exchange requirements for payment service providers that will allow the ‘Eurofisc’ network to exchange and analyse payment data on cross-border sales. To achieve this, the Commission will develop a new Central Electronic System of Payment Information (CESOP), which is expected to be launched in 3 years’ time.
According to a European source, agreement has already been reached on the main elements of the text. Some Member States still have parliamentary scrutiny reservations to lift, they said, but no country has raised any specific problems with the text.
Moreover, all outstanding issues were settled at the meeting of Member States’ ambassadors to the EU (Coreper) on Wednesday 30 October, including the question of the date of transposition and application.
The Commission has proposed that the new rules apply from 1 January 2022. But several delegations reportedly pointed out that it will take longer for tax authorities and companies to adapt their IT systems properly to the new requirements and, therefore, the Finnish Presidency of the Council of the EU initially proposed postponing the application of the new provisions until 1 January 2024.
Other delegations called for a more ambitious approach and requested that the date of application be set at 1 January 2023. According to the same source, this is the date that was finally chosen.
For the rest, the compromise text, dated 25 October and copied to EUROPE, contains only a few changes compared to the Commission's original text.
In particular, it proposes to extend the period during which payment service providers are required to keep information on cross-border payment transactions from 2 to 3 years, in order to help Member States to combat VAT fraud in e-commerce. The rapporteur in the European Parliament, who is only consulted on the matter, has also recommended a period of 3 years (see EUROPE 12358/4).
The EU Council text also clarifies that the requirements laid down in the Directive apply only to payment services provided as regards cross-border payments. A payment is considered to be a cross-border payment when the payer is located in one Member State and the payee is located in another Member State, in a third territory or in a non-Member State, the text specifies. (Original version in French by Marion Fontana)