Brussels, 23/11/2007 (Agence Europe) - The European Commission adopted a communication on Friday 23 November presenting approaches to improving cooperation between national fiscal administrations in the fight against value added tax (VAT) fraud. These suggestions will be discussed at the next Ecofin Council on Tuesday 4 December and, if the European finance ministers back the Commission, will be the subject of legislative proposals at the beginning of 2008. Other documents on the fight against VAT fraud will follow next year on the subjects of taxation of intra-Community supplies in the Member State of departure and the implementation in Austria of a pilot project introducing a national reverse charge mechanism (see EUROPE 9202).
The system for the exchange of information on intra-Community supplies does not, in the Commission's view, enable the relevant information to combat VAT fraud effectively to be obtained in time. Its proposals at the beginning of 2008 envisage “a higher frequency” of reports on such supplies and “more rapid transmission of this information between fiscal administrations”. “Almost three months” are needed for a national fiscal administration to respond to a request sent from another national fiscal administration, explained a spokesperson for Commissioner Kovács, who is responsible for taxation. This “rather long” period, she added, gives fraudsters space and time to disappear. The delay in transmitting information could be reduced to one month while still maintaining the spirit of the EU aim to reduce the administrative burden on enterprises. She also raised the question of increasing harmonisation of “obligations to declare VAT” and “billing rules”, on the condition of making up for these new obligations elsewhere.
The question of criminal sanctions for those involved in fraudulent tax operation should be tackled. The finances ministers could invite their counterparts in Justice to demand an initiative along these lines. Elsewhere, “an update of the data on the VAT arrangements in place is essential”, in the Commission's view. In this sense, “the registration and removal of operators” could be the subject of a joint European approach and include the following operations: - “increased vigilance when granting VAT numbers” to avoid false registration; - removal of taxable persons no longer carrying out liable operations; - holding Member States responsible for the information reported and the consequences of void or incorrect information.
Finally, the Commission wishes to “strengthen the capacity of fiscal administrations in the area of VAT collection in case of fraud”. Two approaches are put forward: - strengthening the “conditions of application of joint and several liability”, which would enable a person other than the one normally liable responsible for payment; - a legislative initiative strengthening the “mutual assistance mechanism for the recovery of tax debts”. (M.B.)