| European steps to tackle carousel fraud |
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| Tuesday, 18 March 2008 | |
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The European Commission has adopted changes to VAT rules between member states. The plans proposals for the amendment of the VAT Directive and the VAT Administrative Cooperation Regulation aim to speed up the collection and exchange of information on transactions within the European Union from 2010 onwards. The Commission claimed that this would enable the member state to detect carousel fraud very quickly. No significant administrative burden The proposals are part of a range of legislative and administrative measures which have been, or are about to be, agreed in order to combat VAT fraud more effectively. László Kovács, the European Commissioner responsible for taxation and the customs union, said that the measures being proposed are the first step towards a more effective fight against VAT fraud. “Their advantages are that they can be implemented very quickly and do not impose any significant administrative burdens on economic operators,” Kovács added. Intra-Community carousel VAT fraud occurs where a person liable for VAT who has acquired goods or services within the Community on which no VAT has been paid supplies these goods or services within the Community with VAT imposed but then ‘disappears’ without paying the VAT into the Exchequer. When a transaction takes place within the EU, it currently takes between three and six months for information about that transaction to be sent to the member state in which the VAT is due. Monthly VAT declarations Under the proposals for a directive and a regulation, this period will be reduced to between one and two months, thus enabling any fraud to be detected much faster. The Commission proposes harmonising and reducing to one month the period which persons liable to VAT have for declaring intra-Community transactions involving the supply of goods or services within the Community. The period for transmission of this information between member states will be reduced from three months to one month. Information on intra-Community purchases of goods or services where the buyer or customer is liable for VAT will be collected monthly to make it easier to cross-check the data with that provided by suppliers. For this purpose, buyers or customers making transactions to a value of more than EUR 200,000 per calendar year will be obliged to submit their VAT declarations monthly. The Commission said that the threshold had been set at this level to avoid imposing extra obligations on undertakings which make intra-Community acquisitions only occasionally or only for small amounts, while having regard to the significant amounts which fraud represents. Conventional measures The procedures for submitting declarations on intra-Community transactions in member states in which these procedures are abnormally complex will be simplified to reduce the burden which the procedures may impose on undertakings. The European Commission was adamant that the measures would not impose an additional administrative burden on economic operators, based on various consultations carried out within the private sector. In addition to the proposals for a directive and a regulation, the Commission recently submitted several other conventional measures to the member states’ tax authorities for consideration and for a decision. Some of these measures do not require any changes to EU legislation and can therefore be implemented quickly by the national authorities. Automated access to non-sensitive data With effect from 2009, the department which checks the data on registration for VAT purposes on the Europa website will enable confirmation to be obtained of the name and address of trading partners established in other member states and will issue personal consultation certificates. This measure is intended to increase the legal certainty of operators acting in good faith and to enable the tax authorities to carry out more effective controls. The Commission said that considerable progress had also been made in discussions with the national authorities on automated access by all other member states to certain non-sensitive data held by member states on their own taxable persons (business sector, certain data concerning turnover, etc.) and harmonisation of the procedures for the registration and de-registration of persons liable for VAT to ensure the swift detection and de-registration of fake taxable persons. It added that the Expert Group was considering the introduction of minimum standards. Related articles
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