On Friday 8 November, EU Economy and Finance Ministers reached political agreement (‘general approach’) on proposals to better combat VAT fraud in the e-commerce sector (see EUROPE 12361/3).
Member States will have to apply the new rules from 1 January 2024. These two texts aim to facilitate the detection of tax fraud by Member States’ authorities and to complement the existing VAT regulatory framework, recently amended by the VAT Directive on electronic commerce.
The Commissioner for Economic Affairs, Pierre Moscovici, recalled that in 2015, €5 billion of VAT was lost in the EU, solely on imports of goods. He said the text “takes into account the comments of payment service providers”, but deplored the postponement of the text’s entry into force to January 2024. Italy, in particular, would have preferred the date of 1 January 2023, and France was flexible on 2023 or 2024.
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. The Commission will have to set up a ‘central electronic system for payment information’ (CESOP) for the purpose of investigating suspected cases of fraud or detecting VAT fraud.
The EU Council must still formally adopt the text, once the European Parliament has delivered its opinion.
The European Payment Institutions Federation, European Banking Federation, European Savings and Retail Banking Group and European Association of Co-operative Banks regretted that the EU Council had adopted the text “without the amendments required by the sector”.
To consult the texts covered by the agreement on VAT fraud in e-commerce: http://bit.ly/34G9tSN (Original version in French by Lionel Changeur)