Market leading insight for tax experts
View online issue

ECON committee report on administrative measures against VAT fraud

printer Mail

The EU Parliament’s ECON committee has published its draft report, suggesting amendments to the Commission’s new administrative cooperation regulation, which introduces measures to tackle VAT fraud through enhanced sharing of information between EU tax administrations and law enforcement bodies from January 2020. The ECON committee has also published its draft report on proposals to involve payment service providers more closely in the information exchange network from January 2022.

The new administrative cooperation regulation entered into force in November 2018 and will apply for most purposes from 1 January 2020. The committee’s draft report broadly supports the Commission’s proposal, with amendments that include requiring payment service providers to keep records of transactions for three years, rather than two, and retention of records in the prospective ‘central electronic system of payment information’ (CESOP) for five years, rather than two. The committee also suggests the need to consider including virtual currencies in the proposal and the potential for use of blockchain technology.

The new rules aim to strengthen cooperation between member states, making more use of IT systems to share VAT information and intelligence on the most serious cases of VAT fraud. In May, the Commission launched its ‘transaction network analysis’ (TNA) tool, which will provide tax authorities with automated analysis of VAT data from intra-EU supplies. The TNA has been developed on a voluntary basis by 25 member states (not including the UK).

Proposals for establishment of CESOP were published in a new regulation and amendment to the VAT directive in December 2018. Separately, The ECON committee has published its draft report on those proposals, making similar recommendations for extending the required period for payment service providers to keep records of transactions and delaying implementation until January 2023.

Issue: 1462
Categories: News