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Legalnotice

English (en)

European Commission

Taxation and Customs Union

Taxation

Tax Co-operation, control and anti-fraud

> Combating tax fraud

Tax Co-operation, control and anti-fraud

Combating tax fraud

The debate on tax fraud was launched at EU level in May 2006 by the Commission'sCommunication (COM(2006) 254) on a

European strategy to combat taxfraud

(seespeechby Commissioner Kovács, press releaseIP/06/697andMEMO/06/221). The Council made quickly clear that priority should be given to VAT fraud and efforts arenow fully focused on this issue.The debate on VAT fraud has been divided into 2 main areas:

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Conventional measures to reinforce the existing VAT system

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More far reaching measures to modify the system, namely

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An option for Member States to introduce a general reverse chargesystem;

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Taxation of Intra-Community transactions

As a response to the ECOFIN Council conclusions of 28 November 2006, the Commissioncreated a new expert group with Member States, the "Anti Tax Fraud Strategy (ATFS)"expert group, with a view to conduct the technical discussions on the conventional measures.Furthermore, in order to provide European businesses the opportunity to express their viewson the way VAT is tackled today and how to fight VAT fraud, two "VAT fraud conferences"were organised on 29 March 2007 and 23 January 2009 respectively.Fighting 'EU fraud' in general and tax fraud in particular on the investigation side is a matterfor the European Commission's Anti-Fraud Office (OLAF). For more information seeOLAF's website.

Legislative proposals

1. More far reaching measuresIn February 2008 the Commission presented its Communication (COM/2008/109) on the twomore "far reaching" measures to change the VAT system in order to fight fraud. In thisCommunication the Commission analyses the taxation of Intra-Community transactions andthe introduction of the option of a general reverse charge system. The Communication raiseda number of key questions on the way forward for the far reaching measures.

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Until now the Council has not provided the required steering to the Commission as to thedesirability of a pilot project for the reverse charge in a volunteering Member State (Austria).In absence of such steering, the Commission will not take further action in this area.2. Conventional measuresOn 23 November 2007 the Commission presented a Communication (See the Commission'sCommunicationCOM/2007/758and the working documentSEC/2007/1584) by which it asked the Council for political steering on some key elements of the VAT anti-fraud strategy within the EU.These key elements concerned the conventional measures like the need of tax administrationsfor accurate information, the integration of an EU approach into the management of the VATsystem and the importance of updated information on the VAT status of persons.The ECOFIN Council meeting of 4 December 2007 provided political steering for furtherwork on certain conventional measures targeting to fight VAT fraud more efficiently.The work carried out in ATFS on the conventional measures has lead to a first Commissionproposal, adopted on 17 March 2008 (see press releaseIP/08/454andCOM/2008/147 ) for the amendment of the VAT Directive and the VAT Administrative CooperationRegulation to speed up the collection and exchange of information on intra-Communitytransactions from 2010 onwards. The aim of this proposal is to ensure that Tax Authorities of the destination Member States are informed much quicker than today about intra-Communityacquisitions taking place on their territory and therefore have the possibility to act at anearlier stage.Based on that first Commission proposal, the Council on 16 December 2008 adopted aDirective and a Regulation, after consultation of the European Parliament and the EuropeanEconomic and Social Committee. See thepress notice(10th item), theCouncil's press release and theadopted texts(EU OJ No L 14 of 20 January 2009).

Working programme

At the ECOFIN of 14 May 2008, the Commission reported on the work that has been carriedout in the first half of 2008 in close cooperation with the Member States. It also announcedthe presentation of a communication for November 2008 and the different legislativeproposals it intends to present by the end of 2008, including a timetable.1. The CommunicationThe European Commission has adopted on 1 December 2008 a Communication(COM/2008/807, see also press releaseIP/08/1846) setting out a short term action plan with a list of future legislative measures aiming at enhancing tax administrationscapacity to prevent and detect VAT fraud (in particular "missing trader fraud") as well as torecover taxes in case of fraud. Most of these measures directly result from the discussions onthe conventional measures that took place in the Anti Tax Fraud Strategy (ATFS) group.This Communication intends also to initiate a reflection on a longer term scale notably about

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the relation between taxpayers and Tax Administrations and the opportunities offered by ITin that context.2. Proposal presented in December 2008 and Directive adopted in June 2009Also on 1 December 2008, the European Commission presented a proposal to amend theVAT Directive in two specific areas (see press releaseIP/08/1846and proposalCOM/2008/805):

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Harmonise the conditions for the importer to benefit from the exemption of VAT uponimportation, when this importation is followed by an intra-Community supply or transferof goods to another Member State. This should avoid the increasing misuse that fraudstersmake of this particular exemption in missing trader fraud schemes. That part of theproposal was adopted by the EU Council on 25 June 2009 and this new Directive willapply as from 1 January 2011 (see theCouncil press releaseand the text of theDirective). Under the Directive the exemption will apply only if the importer has provided theMember State of import with his VAT identification number, his customer's VAT numberand the evidence that the goods are intended to be transported to another Member State.

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Make the supplier in intra-community transactions liable for the VAT loss created by hismissing customer in another Member State, when he contributed to the loss by notreporting (or by reporting false or incomplete information or by reporting late) his supplyto his VAT authority. The proposal will provide tax administrations with a tool forrecovering VAT from non-established traders, that intentionally do not report (or reportincomplete/false data or report late) their supply to the tax authorities.3. Communication and proposal on invoicing rules adopted in January 2009The European Commission on 28 January adopted a proposal to change the VAT Directive(2006/112/EC) in respect to the invoicing rules, based on a Communication on thetechnological developments in the field of electronic invoicing. The aim of the proposal is toincrease the use of electronic invoicing, reduce burdens on business, support small andmedium sized enterprises (SMEs) and help Member States to tackle fraud. See our "VATinvoicing" web page for more detail.4. Measures scheduled for 2009

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Recovery of taxes: On 2 February 2009, the Commission presented a proposal for a newDirective on mutual assistance for the recovery of taxes (see press releaseIP/09/201andproposalCOM/2009/28). The creation of a European instrument permitting enforcementof legal acts in another Member State and the reinforcement of the possibility to takeprecautionary measures in another member State are two elements in this proposal whichshould improve the capacity of Member States in cross border collection of taxes.

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On 18 August 2009, the Commission adopted a proposal for a recast of the Regulation onAdministrative Cooperation (Regulation N° 1798/2003), (see press releaseIP/09/1239andproposalCOM/2009/427) which focuses on the improvement of theadministrative cooperation and enhancing the fight against VAT fraud. It covers thefollowing items:3 de 5Página Combating tax fraud - Taxation and Customs Union - European Commissione31-10-2009http://ec.europa.eu/taxation_customs/taxation/tax_cooperation/reports/index_en.htm