VAT fraud related to e-commerce results in a big loss of money for Member States. Identifying the online business supplying goods and services to customers (business-to-consumer -B2C) in another Member State can be difficult because tax administrations may lack information. The purpose of the measures voted today is to improve the exchange of information on cross-border payments in order to combat VAT fraud in electronic commerce and to clarify the procedures for payment service providers.
The regulation on administrative cooperation tackles the most widespread forms of cross-border fraud by improving how tax administrations cooperate amongst themselves and with other law enforcement bodies. The directive on requirements for payment service providers outlines rules for the Member States to collect records made electronically available by payment service providers in a harmonised way. It also introduces a new central electronic system for the storage of the payment information and for the further processing of this information by anti-fraud officials in the Member States within the Eurofisc framework.
MEP Ondřej KOVAŘÍK, Renew Europe Group’s shadow rapporteur on this report, said:
“This legislation will help drastically reduce the revenues lost to VAT fraud in our financial systems, so I fully support the efforts of the EU to address the deficiencies in the VAT regimes in Europe.
We must not forget the time and money it takes, especially for smaller companies, to collect and report the appropriate VAT information to authorities. Therefore, it is also important that the new rules do not add undue administrative burden, which may hamper the efforts of smaller businesses to grow, particularly across borders within the Single Market.”
These proposals are part of the package of legislation on the mandatory transmission and exchange of VAT-relevant payment information and part of the EU’s broader agenda to tackle VAT fraud and improve VAT collection of internet sales. They reflect Parliament’s priorities, particularly as regards administrative cooperation and payment service providers. The Council, thought, will adopt the proposals after consulting the European Parliament, but without being obliged to follow its opinion.