Explanatory Memorandum to COM(2012)465 - Action programme for taxation in the EU for the period 2014-2020 (Fiscalis 2020) and repealing Decision N°1482/2007/EC

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dossier COM(2012)465 - Action programme for taxation in the EU for the period 2014-2020 (Fiscalis 2020) and repealing Decision N°1482/2007/EC.
source COM(2012)465 EN
date 29-08-2012
1. CONTEXT OF THE PROPOSAL

On 29 June 2011, the Commission adopted a proposal for the next Multi-Annual Financial Framework for the period 2014-2020 i: a budget for delivering the Europe 2020 Strategy proposing among others a new Fiscalis 2020 programme. This programme will contribute to the Europe 2020 Strategy for smart, sustainable and inclusive growth i, by strengthening the functioning of the tax systems within the Member States and the Union's Single Market. By facilitating the evolution of national tax administrations towards e-tax administrations, the new programme also contributes to the establishment of a digital Single Market ('Digital Agenda for Europe').

The smooth functioning of taxation systems in the internal market is dependent on effective and efficient processing of cross-border transactions by national tax administrations, the prevention of and fight against tax fraud and protection of tax revenues. This implies exchange of large quantities of information between tax administrations, but also tax administrations working more efficiently and at the same time reducing the administrative, economic and time burden for tax payers involved in cross-border activities. This can only be achieved on the basis of cooperation between tax administrations of the Member States and third parties. Given the increasing globalisation, an efficient fight against fraud should equally have an international dimension. Therefore, the programme will also support the exchange of information with non-Member States in the realm of the international agreements concluded with the non-Member States concerned.

The proposed programme will support the cooperation mainly between the tax authorities and, if appropriate, other parties concerned. It is the successor programme of the Fiscalis 2013 programme which ends on 31 December 2013. The proposed Fiscalis 2020 programme will support tax cooperation in the Union clustered around human networking and competency building, on the one hand, and IT capacity building on the other hand. The first cluster allows for the exchange of good practices and operational knowledge amongst the Member States and other countries participating in the programme. The latter enables the programme to fund appropriate IT infrastructure and systems that allow tax administrations in the Union to evolve to fully-fledged e-administrations. The main added-value of the programme is generated by enhancing the capacity of Member States in fighting fraud and possibly raising revenue, while cutting costs in developing the tools for these purposes.

Contents

1.

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS



4.

2.1. Consultations and expertise


In the context of the midterm evaluation of the Fiscalis 2013 programme, a contractor analysed the effectiveness, efficiency, relevance and value added of the programme. Monitoring data available from the different activities was used.

Another contractor carried out a study of the possible framework of the future Fiscalis programme: including a comprehensive analysis of future challenges and structural problems of the taxation systems in the internal market. The findings of this study were discussed with the representatives of the participating countries in a workshop organised in June 2011. In preparation of this workshop, a roundtable was organised in spring 2011 in the relevant programme Committee meeting where participating countries were asked to identify the main strengths of the programme and how the efficiency of the programme could be improved.

Considering the importance of the activities related to the exchange of information, a separate study was carried out on the future implementation strategy for the exchange of information. This study was presented in a workshop for Chief Information Officers of tax administrations in June 2011.

An impact assessment was prepared analysing the continuation of the Fiscalis programme and approved by the Impact Assessment Board on 22 September 2011.

Recommendations for design and further improvements of the programme were taken on board in the development of the future programme proposal. The programme objectives put, for instance, more emphasis on reduction of administrative burdens on tax administrations and taxpayers, improving cooperation with third countries and third parties, and also at reinforcing the fight against tax fraud. In addition the programme proposal includes new tools to address new challenges, notably new joint action types, the improvement of the availability of the results of the programme activities taking advantage of online collaboration methods and defining a framework to better monitor the outputs of the programme.

5.

2.2. Impact assessment


Considering the overall policy context and problems ahead for taxation in the next decade, a number of policy options has been analysed and compared in the impact assessment accompanying the present programme.

Baseline: continuing the programme with the current objectives and design.

No continuation of the programme: the programme would be discontinued and EU funding will no longer be provided for IT tools, joint actions or training activities supporting cooperation in the taxation area.

Upgrade the baseline: This option would encompass the baseline scenario tailoring the objectives to the future challenges. It puts additional focus on the fight against tax fraud, avoidance and evasion, working towards a more efficient tax administration, addressing the high administrative burden for taxpayers and tax administrations and considering the cooperation with third countries and third parties.

Upgrade and cater for new policies: Besides addressing the problems described under the option 'upgrading the baseline scenario', this policy option would offer the means to extend cooperation to new areas that may follow from policy evolution and notably enable the programme to have the means to facilitate coherent application and implementation of this new legislation and to implement the related exchange of information and administrative cooperation.

The impact assessment identified option 3 'Upgrade the baseline' as the preferred option. It is in line with the proposal for a new budget for Europe 2020 and scores best on acceptability by Member States.

2.

LEGAL ELEMENTS OF THE PROPOSAL



6.

3.1. Legal basis


The proposed Fiscalis 2020 programme provides mechanisms, means as well as the necessary funding aiming to improve cooperation between tax administrations. The proposed measure comprises inter alia joint actions such as seminars, workshops, training, multilateral controls, establishment of expert teams etc. in which Member States and their officials may participate on a voluntary basis. The overall aim of those joint actions is to enhance administrative cooperation and improve the administrative capacity of Member States in the area of taxation which justifies the use of article 197 TFEU.

An important part of the Fiscalis 2020 programme concerns the support of the exchange of information between Member States in the framework of administrative cooperation in the taxation area in the European Union. The relevant Union legislation on administrative cooperation provides for the use by the Member States of the European Information Systems. The present programme specifies that the Commission together with the participating countries shall ensure that those systems are developed, operated and appropriately maintained. In this context, it foresees IT capacity building, by the Union, through the development, maintenance, operation and quality control of the Union components of the said systems. These single components will be used by Member States instead of a variety of differing devices. Provision is also made for the coordination of the establishment and functioning of the Union and non-Union components of the systems, with a view to ensure their operability, interconnectivity and continuous improvement. These IT capacity building aspects justify that the programme also relies on article 114 TFEU.

Given the increasing globalisation of the economy, the administrative cooperation with developed third countries is essential to efficiently fight against tax fraud. To simplify and facilitate the technical cooperation between those countries and the Member States and to improve the security of the current exchange of sensitive information in the context of bilateral tax agreements, the Union should conclude agreements with developed third countries to allow the use of the Union components of the European Information Systems by these countries. Therefore article 212 TFEU is used as a supplementary third legal base.

7.

3.2. Subsidiarity and Proportionality


Action at Union level rather than at national level is necessary for the following reasons:

· It is not sufficient to adopt tax legislation at European level, taking it for granted that its implementation will run smoothly and if not, the infringement procedure will be sufficient. In order to efficiently implement EU and national tax law, cooperation and coordination at the European level are necessary.

· The challenges identified cannot be tackled if Member States are not looking beyond the borders of their administrative territory and cooperate intensively with their 26 counterparts. Without intense cooperation and coordination between Member States, unfair tax competition and tax shopping would increase, while fraudsters would exploit the lack of cooperation between national authorities. The Fiscalis 2020 programme, implemented by the Commission, offers Member States a Union framework to develop these cooperation activities, which is more cost efficient than if each Member State would set up its individual cooperation framework on a bilateral or multilateral basis.

· The Fiscalis 2020 programme also supports the highly secured dedicated communication network allowing the exchange of information in the framework of administrative cooperation, both for direct and indirect taxation. The programme as such interconnects national tax administrations in approximately 5 000 connection points. This common IT network ensures that every national administration only needs to connect once to this common infrastructure to be able to exchange any kind of information. If such an infrastructure were not available Member States would have to link 26 times to the national systems of each of the other Member States.

The Commission shall for the purpose of implementing the programme, according to Article 17 TEU, exercise coordinating, executive and management functions, as laid down in the Treaties. The Fiscalis 2020 programme is therefore in line with the principles of subsidiarity and proportionality (as set out in Art. 5 of the Treaty of the European Union (TEU).

8.

3.3. Instrument


In line with the conclusion of the relevant impact assessment, EU intervention by means of a funding programme is appropriate. Taking into account the positive feedback resulting from the midterm evaluation of the Fiscalis 2013 programme, a successor Fiscalis 2020 programme is being proposed by the Commission.

In accordance with the Commission legislative policy adopted in the framework of the Multi-Annual Financial Framework, the successor funding programme is proposed as a regulation.

3.

BUDGETARY IMPLICATION



The timing of the review of EU funding programmes is linked to the proposal for a new Multiannual Financial Framework, as amended on 6 July 2012 i. In accordance with this proposal, this Regulation on the Fiscalis 2020 programme contains a budgetary framework of EUR 234.370.000 (in current prices) for the period of 2014-2020.

The Fiscalis 2020 programme will be implemented by means of a direct central management mode and in a priority-based manner. Work programmes are established –together with the stakeholders- stipulating the priorities for a specific period.

9.

5. OPTIONAL ELEMENTS


10.

5.1. Annotations to specific legal provisions


11.

5.1.1. Chapter I: General Provisions


The scope of the programme has been brought in line with recent Union tax legislation meaning that it will not only cover VAT, excise duties and taxes on income and capital but also other taxes which are subject of Union tax legislation.

The Fiscalis 2020 programme will be open for participation to the Member States, Candidate Countries and potential Candidates. In line with the overall Union policy in this respect, countries of the European Neighbourhood Policy will also have the possibility to take part in the programme under certain conditions. Finally, external experts might also participate in specific actions (e.g. representatives of other authorities, trade, national and international organisations, and possibly other experts) if required to realise the programme objectives.

(a) The objectives of the Fiscalis 2020 programme address the identified challenges and expected problems for tax policy and authorities in Europe in the next decade. The overarching objective of the programme is to strengthen the internal market through efficient and effective taxation systems. To provide an adequate answer to the future challenges in the tax area in the Union, the following specific objective has been defined for the programme: improve the operation of the taxation systems, in particular through cooperation between participating countries, their tax authorities, their officials and external experts. The programme will have the following priorities:to support the preparation, coherent application and effective implementation of Union tax law

(b) to fight against tax fraud, tax evasion and tax avoidance, in particular by enhancing effective and efficient administrative cooperation and exchange of information

(c) to contribute to the reduction of administrative burden on tax administrations and compliance costs for taxpayers

(d) to work towards efficient tax administration, in particular as regards tax compliance and administrative capacity of tax administrations.

(e) to enhance a coherent application and implementation of Union tax policy.

(f) to enhance cooperation with international organisations, other governmental authorities, third countries, economic operators and their organisations with a view to fight against tax fraud, tax evasion and tax avoidance in particular by enhancing effective and efficient administrative cooperation and exchange of information, increasing tax compliance and enhancing tax administration.

The setting up of EEAS under the authority of the High Representative Vice-President (HRVP) will facilitate the objective to achieve more coherence and coordination in EU dealings with EU partner countries requiring international cooperation.

12.

5.1.2. Chapter II: Eligible actions


The types of actions considered eligible for programme funding are similar to the ones under the current programme, namely:

· Joint Actions pursuing the exchange of knowledge and good practice between tax officials of the participating countries;

· European Information Systems (EIS) i facilitating the exchange of information and access to common data ;

· Training activities leading to human competency building for tax officials across Europe.

Modifications have been introduced in certain categories of actions.

· The Fiscalis 2020 programme will include some new joint action tools:

· Expert teams are structured forms of cooperation, pooling expertise and/or addressing specific operational activities. They can be set up with a non-permanent or permanent character and could receive support such as online collaboration services, administrative assistance and infrastructure and equipment facilities to underpin the realisation and success of an action.

· Actions for public administration capacity building will support tax authorities that face particular difficulties, be it lacking knowledge, expertise, organisational or any other deficiencies which can be overcome through tailor-made support actions provided by fellow countries and or Commission officials.

· As regards the European Information Systems, the new programme defines 'Union components' as IT assets and services which concern some or all of the Member States and are owned or acquired by the Commission. These Union components are described in point 2 of the Annex of the proposed legal act. The 'national components' are all components which are not 'Union components'. They are developed, installed and operated by Member States, and thus subject to the funding and responsibility of Member States.

The redefinition of Union components should be seen in the light of the changing practice of IT systems development. Currently each Member State is responsible for the implementation of its national systems according to common specifications, resulting in 27 developments for each system, 27 trader interfaces, 27 schedules of development, 27 sets of project related or operational difficulties, etc. In particular in the light of the economic and financial crisis, the Commission considers that the development of IT systems should be done more efficiently.

This evolution aims at improving the consistency of data and application of rules by gradually moving towards more shared IT development (knowledge, data, IT components). It will bring improved working methods for instance through business process modelling, better quality specifications but also will bring more standardisation for instance harmonising interfaces for traders. The new approach towards Union components will limit the risk for divergent development and deployment plans. It also provides additional means to control the finalisation of the project as common plans avoid that the slowest member in the development chain determines the entry in operation of the entire project.

The EIS may also be used to support exchange of information between non-EU countries and the Member States in the framework of bilateral tax agreements.

13.

5.1.3. Chapter IV: Implementation


In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission. As such an annual work programme will be adopted in accordance with the examination procedure referred to in Article 5 of Regulation (EU) No 182/2011 of the European Parliament and the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers i.

14.

5.2. Simplification


15.

5.2.1. How did the proposal contribute to simplification?


(g) Coherence with the financial regulation

The programme proposal is fully coherent with the financial regulation and its implementing provisions. Grants and procurement are the main financial instruments used to implement the programme. The programme incorporates the simplification measures proposed in the Commission proposal for the revision of the financial regulation, notably the recourse to lump sums, flat rates and unit costs. In view of the importance of the processing of subsistence and travel costs paid under the programme, the programme will introduce simplification measures offered by the new Financial Regulation in this area.

(h) Coherence between the Customs and Fiscalis 2013 programmes

The management of the previous Customs and Fiscalis programmes had been fully aligned based upon identical procurement rules and grant models, common management guides and IT based systems. The management model includes clear and simple procedures for organising programme activities. The programme management team of the Commission is assisted by programme management teams in the different customs and tax administrations acting as facilitator and first point of contact for customs, respectively taxation officials in Member States. The management model allows the deployment of activities, some weeks at the most, reacting quickly to newly emerging needs, while at the same time guarding coherence between the different activities. The Member States have expressed their satisfaction with the management model of the programme in the midterm evaluation[10].

Considering this close alignment of both programmes and further to the simplification objective of the proposal for the 2014 – 2020 multiannual financial framework[11], the Commission initially proposed a single FISCUS programme as successor for the Customs and Fiscalis 2013 programmes[12]. In view of the unanimity of Member States being in favour of splitting the proposed single programme, the Commission, while maintaining its position against this split, proposed an amended proposal with two legislative texts for respectively the Customs and Fiscalis 2020 programmes. Notwithstanding the introduction of these separate legislative texts, maintaining the alignment between both programmes will remain a priority for the Commission and where appropriate, it will be further pursued when implementing the Customs and Fiscalis 2020 programmes.

(i) Did the programme consider externalisation?

The possibility to implement the future programme through an executive agency was considered. An agency could be empowered to execute tasks such as the selection of the activities under the programme, the administrative preparation and follow-up of the activities, monitoring of the activities, grants and procurement of IT systems. However, such an executive agency would add an additional layer to the governance structure, increasing the cost of coordination and checks, complicating and lengthening decision making by adding new administrative procedures. Also, it would have a negative impact on the level of know-how within the Commission and increase the risk of a fragmentation of content versus administrative aspects. This option would not bring the expected business benefits and has therefore been discarded.

In an alternative scenario, it was also considered to transfer all relevant IT activities to national administrations with the exception of the CCN/CSI network and its related services. In this scenario the risk is very high that gradually it would be necessary to set-up more central governance structures. The resulting impact would be similar to the effects of the discontinuation of the programmes which would put at risk the efficiency and effectiveness of tax administrations and reduce the ability to prevent and detect fraud. Considering the negative impacts on results and performance, this scenario was also discarded.

(j) Does the programme use common IT tools to reduce the administrative burden on beneficiaries and contractors?

The Customs 2013 and Fiscalis 2013 programmes already deploy tools to facilitate the management for of the programme activities and related expenditure through a common Activity Reporting Tool (ART2). This will be continued.

16.

5.2.2. Performance measurement of the proposal


The performance of the programme will be measured using a coherent set of performance, impact, result and output indicators linked to the general and specific objectives and priorities of the programme and building the link with the Commission Management Plan. The detailed list of impact, result and output indicators is available in the Impact Assessment. The Commission has identified targets for some outputs of the programme, others will be completed through actions within the Fiscalis 2013 programme. The targets of all outputs will be identified before the start of the Fiscalis 2020 programme by the Commission and presented to the programme Committee .

17.

5.2.3. Is the programme proposal coherent with overall Commission policy


The programme will contribute towards the objectives of the Europe 2020 Strategy by strengthening the Single Market, enhancing the productivity of the public sector and sustain technical progress and innovation in administrations, and by promoting employment. It will support flagships on the digital agenda for Europe[13], the flagship initiative on the Innovation Union[14], the flagship on the Agenda for New Skills and Jobs[15] and the flagship initiative on an industrial policy for the globalisation era[16]. The programme will also support the Single Market Act[17]. As concerns the protection of the financial interests of the Union and Member States, the programme will support collaborative efforts to fight tax fraud.

18.

2011/0341/b (COD)


Amended proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

establishing an action programme for taxation in the European Union for the period 2014-2020 (Fiscalis 2020) and repealing Decision N°1482/2007/EC

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 114, 197 and 212 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national Parliaments,

Having regard to the opinion of the European Economic and Social Committee[18],

Acting in accordance with the ordinary legislative procedure,

Whereas:

The multi-annual action programme for taxation which applied before 2014 has significantly contributed to facilitating and enhancing cooperation between tax authorities within the Union. The value added of this programme has been recognised by the tax administrations of the participating countries[19]. The challenges identified for the next decade cannot be tackled if Member States are not looking beyond the borders of their administrative territory and cooperate intensively with their 26 counterparts. The Fiscalis 2020 programme, implemented by the Commission, offers Member States a Union framework to develop these cooperation activities, which is more cost efficient than if each Member State would set up its individual cooperation framework on a bilateral or multilateral basis. It is therefore appropriate to ensure the continuation of this programme by establishing a new programme in the same area.

The programme activities, i.e. the European Information Systems, the joint actions for tax officials and the common training initiatives, are expected to contribute to the realisation of the Europe 2020 Strategy for smart, sustainable and inclusive growth[20]. In providing a framework for activities which strive for more efficient tax authorities, strengthen the competitiveness of businesses, promote employment and contribute to the protection of the Union's financial and economic interests, the programme will actively strengthen the functioning of the taxation systems in the internal market.

The scope of the Fiscalis 2020 programme should be brought into line with current needs so as to allow for supporting activities in regard to all taxes harmonised at Union level and to Union legislation in relation to taxation. This programme should therefore not only cover taxes harmonised at Union level but also other taxes falling within the scope of Union tax legislation in the meaning of Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures[21].

To support the process of accession and association by third countries, the programme should be open for the participation of acceding and candidate countries as well as potential candidates and partner countries of the European Neighbourhood Policy[22] if certain conditions are fulfilled. Considering the increasing interconnectivity of the world economy, the programme continues to provide for the possibility to involve external experts, such as representatives of governmental authorities, economic operators and their oganisations or representatives of international organisations, in certain activities. .

The programme objectives take into account the problems and challenges identified for taxation in the next decade. The programme should continue to play a role in vital areas like the coherent implementation of Union law, administrative cooperation, the protection of the financial and economic interests of the Union, enhancing the administrative capacity of tax authorities. Given the problem dynamics of new challenges identified, additional emphasis should be put on fighting tax fraud, reduction of administrative burden and enhancing cooperation with third countries and parties.

The programme tools which applied before 2014 have proven to be adequate and have therefore been retained. In view of the need for more structured operational cooperation, additional tools have been added namely expert teams composed of Union and national experts to perform jointly tasks in specific domains, and public administration capacity building actions which should provide specialised assistance to those participating countries needing administrative capacity building.

The European information systems play a vital role in reinforcing the taxation systems within the Union and should therefore continue to be financed under the programme. In addition, it should be made possible to include in the programme new tax related information systems established under Union legislation. European Information Systems should, where appropriate, be based on shared development models and IT architecture .

Given the increasing globalisation, an efficient fight against fraud should equally have an international dimension. It is therefore useful to enable the Union to conclude agreements on technical cooperation with developed third countries to allow those countries to use the Union components of the European Information Systems to support a secureexchange of information between them and the Member States in the framework of bilateral tax agreements.

Human competency building in the form of common training should also be realised through the programme. Tax officials need to build up and update their knowledge and skills required to serve the needs of the Union. The programme should strengthen the human capacity through enhanced training support that targets tax officials as well as economic operators. To this end, the current common training approach of the Union which was mainly based on central eLearning development should develop into a multi-facetted training support programme for the Union.

The programme should cover a period of seven years to align its duration with that of the multiannual financial framework laid down in Council Regulation (EU) N° xxx of xxx laying down the multiannual financial framework for the year 2014-2020[23].

For the entire duration of the programme, a financial envelope should be laid down constituting the prime reference, within the meaning of point [17] of the Interinstitutional Agreement of XX/YY/201Z between the European Parliament, the Council and the Commission on cooperation in budgetary matters and on sound financial management, for the budgetary authority during the annual budgetary procedure.

In line with the Commission's commitment set out in its Communication on the Budget Review of 2010[24] to coherence and simplification of funding programmes, resources should be shared with other Union funding instruments if the envisaged programme activities pursue objectives which are common to various funding instruments excluding however double financing.

The measures necessary for the financial implementation of this Regulation shall be adopted in accordance with Council Regulation (EC, Euratom) No xxx/20xx of xxx on the Financial Regulation applicable to the general budget of the European Communities, and with Commission Regulation (EC, Euratom) No xxx/20xx of xxx laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No xxx/20xx of xxx (references of new financial regulation and implementing act to be added).

The financial interests of the Union should be protected through appropriate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, penalties.

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission in respect of the establishment of annual work programmes. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers[25].

The objectives of the action to be taken, namely establishing a multi-annual programme to improve the operation of the taxation systems in the internal market cannot be sufficiently achieved by the Member States. Since theye cannot efficiently perform the cooperation and coordination necessary to carry out these objectives, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 TEU and establish a multi annual programme. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

The Commission should be assisted by the Fiscalis 2020 Committee for the implementation of the programme.

Directive 95/46 of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data governs the processing of personal data carried out in the Member States in the context of this Regulation and under the supervision of the Member States competent authorities, in particular the public independent authorities designated by the Member States. Regulation (EU) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the EU institutions and bodies and on the free movement of such data, governs the processing of personal data carried out by Commission within the framework of this Regulation and under the supervision of the European Data Protection Supervisor. Any exchange or transmission of information by competent authorities should be in accordance with the rules on the transfer of personal data as laid down in Directive 95/46/EC and any exchange or transmission of information by the Commission should be in accordance with the rules on the transfer of personal data as laid down in Regulation (EC) No 45/2001.

This Regulation should replace Decision N°1482/2007/EC of the European Parliament and of the Council of 11 December 2007 establishing a Community programme to improve the operation of taxation systems in the internal market (Fiscalis 2013) and repealing Decision No 225/2002/EC[26] . That Decision should therefore be repealed,

HAVE ADOPTED THIS REGULATION:

19.

Chapter I General provisions


Article 1 Subject matter

1. A multi-annual action programme 'Fiscalis 2020' ("the programme") is hereby established to improve the operation of the taxation systems in the internal market.

2. The programme shall cover the period 1 January 2014 to 31 December 2020.

20.

Article 2 Definitions


For the purpose of this Regulation the following definitions shall apply:

' tax authorities' means the authorities responsible for applying rules on taxation;

'External experts' means:

(a) representatives of governmental authorities including from countries not participating in the programme according to article 3(2)1 and 3(2)2;

(b) economic operators and their organisations;

(c) representatives of international and other relevant organisations.,

'taxation' means the following taxes:

(a) value added tax provided for in Directive 2006/112/EC[27];

(b) excise duties on alcohol provided for in Directive 92/83/EEC[28];

(c) excise duties on tobacco products provided for in Directive 2011/64/EU[29];

(d) taxes on energy products and electricity provided for in Directive 2003/96/EC[30];

(e) other taxes falling within the scope of Article 2(1)(a) of Directive 2010/24/EU[31].

21.

Article 3 Participation in the programme


1. Participating countries shall be the Member States and the countries referred to in paragraph 2 provided the conditions set out in that paragraph are met.

2. The programme shall be open to the participation of any of the following countries:

acceding countries, candidate countries and potential candidates benefiting from a pre-accession strategy, in accordance with the general principles and general terms and conditions for the participation of those countries in Union programmes established in the respective Framework Agreements, Association Council Decisions or similar Agreements;

partner countries of the European Neighbourhood Policy provided that those countries have reached a sufficient level of approximation of the relevant legislation and administrative methods to those of the Union. The partner countries concerned shall participate to the programme in accordance with provisions to be determined with those countries following the establishment of Framework Agreements concerning their participation in Union programmes.

22.

Article 4 Participation in programme activities


External experts may be invited to take part in selected activities organised under the programme wherever this is useful for the achievement of the objectives referred to in Article 5. These experts shall be selected by the Commission,on the basis of their skills, experience and knowledge relevant to the specific activities.

23.

Article 5 General objective and specific objective


1. The general objective of the programme shall be to strengthen the internal market through efficient and effective taxation systems.

2. The specific objective of the programme shall be to improve the operation of the taxation systems, in particular through cooperation between participating countries, their tax authorities, their officials and external experts.

3. The achievement of those objectives shall be measured on the basis of the following indicators:

the availability of the Common Communication Network for the European Information Systems;

the feedback from participants in programme actions and users of the programme.

24.

Article 6 Priorities


The priorities of the programme shall be the following:

(a) to support the preparation, coherent application and effective implementation of Union tax law

(b) to fight against tax fraud, tax evasion and tax avoidance, in particular by enhancing effective and efficient administrative cooperation and exchange of information

(c) to contribute to the reduction of administrative burden on tax administrations and compliance costs for taxpayers

(d) to work towards efficient tax administration, in particular as regards tax compliance, and administrative capacity of tax administrations.

(e) to enhance a coherent application and implementation of Union tax policy.

(f) to enhance cooperation with international organisations, other governmental authorities, third countries, economic operators and their organisations with a view to fight against tax fraud, tax evasion and tax avoidance in particular by enhancing effective and efficient administrative cooperation and exchange of information, increasing tax compliance and enhancing tax administration.

25.

Chapter II Eligible actions


Article 7 Eligible actions

The programme shall provide, under the conditions set out in the annual work programme referred to in Article 14, financial support for the following types of action:

(a) Joint actions:

seminars and workshops;

project groups, generally composed of a limited number of countries, operational during a limited period of time to pursue a predefined objective with a precisely described outcome;

multilateral controls, joint audits and other activities provided in Union legislation on administrative cooperation organised by two or more participating countries, including at least one Member State, to carry out a coordinated control of the tax liability of one or more related taxable persons;

working visits organised by the participating countries or a third country to enable officials to acquire or increase their expertise or knowledge in tax matters; for working visits organised within third countries only travel and subsistence (accommodation and daily allowance) costs are eligible under the programme;

expert teams, which are structured forms of cooperation, with a non-permanent or permanent character, pooling expertise to perform tasks in specific domains or carry out operational activities, possibly with support of online collaboration services, administrative assistance and infrastructure and equipment facilities;

public administration capacity building and supporting actions;

studies;

communication projects;

any other activity in support of the general and specific objectives set out in Articles 5.

(b) IT capacity building: development, maintenance, operation and quality control, of Union components of European Information Systems set out in point 1 of the Annex and, new European Information Systems established under Union legislation

(c) Human competency building: common training actions to support the necessary professional skills and knowledge relating to taxation.

26.

Article 8 Specific implementation provisions for joint actions


1. Participating countries shall ensure that officials with the adequate profile and qualifications are nominated to participate in the joint actions.

2. Participating countries shall take the necessary measures for the implementation of the joint actions, in particular by raising awareness on those actions and by ensuring an optimal use is made of the outputs generated.

27.

Article 9 Specific implementation provisions for the European Information Systems


1. The Commission and the participating countries shall ensure that the European Information Systems referred to in point 1 of the Annex are developed, operated and appropriately maintained.

2. The Commission shall coordinate, in cooperation with the participating countries, those aspects of the establishment and functioning of the Union and non-Union components of the systems and infrastructure referred to in points 1 and 2 of the Annex which are necessary to ensure their operability, interconnectivity and continuous improvement.

3. The use of the union components of the European Information Systems referred to in point 1 of the Annex by non-participating countries shall be subject to agreements for technical cooperation with these countries to be concluded in accordance with Article 218 TFEU.

28.

Article 10 Specific implementation provisions for common training


1. Participating countries shall integrate, where appropriate, jointly developed training content, including e-learning modules, training programmes and commonly agreed training standards in their national training programmes.

2. Participating countries shall ensure that their officials receive the initial and continuing training necessary to acquire common professional skills and knowledge in accordance with the training programmes.

3. Participating countries shall provide the linguistic training necessary for officials to ascertain a sufficient level of linguistic competence for participation in the programme.

29.

Chapter III Financial Framework


Article 11 Financial framework

1. The financial envelope for the implementation of the programme shall be EUR 234.370.000 (in current prices).

2. The financial allocation for the programme may also cover expenses pertaining to preparatory, monitoring, control, audit and evaluation activities which are required for the management of the programme and the achievement of its objectives; in particular, studies, meetings of experts, information and communication actions, including corporate communication of the political priorities of the European Union as far as they are related to objectives of this Regulation, expenses linked to IT networks focusing on information processing and exchange, together with all other technical and administrative assistance expenses incurred by the Commission for the management of the programme.

30.

Article 12 Types of intervention


1. The Commission shall implement the programme in accordance with the Financial Regulation.

2. Union financial support for activities provided for in Article 7 shall take the form of:

grants;

public procurement contracts;

reimbursement of costs incurred by external experts referred to in Article 4.

3. The co-financing rate for grants shall be up to 100 % of the eligible costs where the latter are travel and accommodation costs, costs linked to organisation of events and daily allowances. That rate shall apply to all eligible actions with the exception of expert teams. For this category of eligible actions, the annual work programmes will specify the applicable co-financing rate when these actions require the awarding of grants.

31.

Article 13 Protection of the financial interests of the Union


1. The Commission shall take appropriate measures ensuring that, when actions financed under this Regulation are implemented, the financial interests of the Union are protected by the application of preventive measures against fraud, corruption and any other illegal activities, by effective checks and, if irregularities are detected, by the recovery of the amounts wrongly paid and, where appropriate, by effective, proportionate and dissuasive administrative and financial penalties.

2. The Commission or its representatives and the Court of Auditors shall have the power of audit, on the basis of documents and on the spot, over all grant beneficiaries, contractors and subcontractors who have received Union funds under this programme.

3. The European Anti-fraud Office (OLAF) may carry out investigations, including on-the-spot checks and inspections in accordance with the provisions and procedures laid down in Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 and Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities[32] with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the European Union in connection with a grant agreement or grant decision or a contract concerning Union funding.

32.

Chapter IV Implementing powers


Article 14 Work programme

In order to implement the programme the Commission shall adopt annual work programmes, which shall set out the objectives pursued, the expected results, the method of implementation and their total amount. They shall also contain a description of the actions to be financed, an indication of the amount allocated to each action type and an indicative implementation timetable. The work programmes shall include for grants the priorities, the essential evaluation criteria and the maximum rate of co-financing. This implementing act shall be adopted in accordance with the examination procedure referred to in Article 15 i.

33.

Article 15 Committee procedure


1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011.

2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

34.

Chapter V Monitoring and Evaluation


Article 16 Monitoring of programme actions

The Commission shall, in cooperation with the participating countries, monitor the programme and its actions in order to follow the implementation of actions carried out.

35.

Article 17 Evaluation


1. The Commission shall ensure a midterm and final evaluation of the programme,rergarding the aspects referred to in paragraph 2 and 3. The results shall be integrated into decisions on possible renewal, modification or suspension of subsequent programmes. An independent external evaluator shall carry out these evaluations.

2. The Commission shall establish a mid-term evaluation report on the achievement of the objectives of the programme actions, the efficiency of the use of resources and the European added value of the programme no later than mid 2018. This report shall additionally address the simplification, the continued relevance of the objectives, as well as the contribution of the programme to the Union priorities of smart, sustainable and inclusive growth.

3. The Commission shall establish a final evaluation report on the aspects referred to in paragraph 2 as well as on the long term impact and the sustainability of effects of the programme no later than end 2021.

4. The participating countries shall provide, on request of the Commission, all data and information relevant for the purpose of contributing to the mid term and final evaluation reports of the Commission.

36.

Chapter VI Final Provisions


Article 18 Repeal

Decision No 1482/2007/EC is repealed with effect from 1 January 2014.

However, financial obligations related to actions pursued under this Decision shall continue to be governed by this Decision until their completion.

37.

Article 19 Entry into force


This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from 1 January 2014.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

38.

For the European Parliament For the Council


The President The President

ANNEX

European Information Systems and their Union components

1. The European Information Systems are the following:

the common communications network/common systems interface (CCN/CSI – CCN2), CCN mail3, the CSI bridge, the http bridge, CCN LDAP and related tools, CCN web portal, CCN monitoring;

supporting systems, in particular the application configuration tool for CCN,, the activity reporting tool (ART2), Taxud electronic management of project online (TEMPO), service management tool (SMT), the user management system (UM), the BPM system, the availability dashboard and AvDB, IT service management portal, directory and user access management;

Programme' information and communication space (PICS);

the VAT related systems, in particular, the VAT information exchange system (VIES) and the VAT refund, including the VIES initial application, the VIES monitoring tool, the Taxation statistical system, VIES-on-the-web, VIES-on-the-web configuration tool, the VIES and VAT refund test tools, the VAT number algorithms, the VAT exchange of eforms, VAT on e-Services (VoeS); VoeS test tool, VAT eforms test tool;

recovery related systems, in particular eforms for recovery of claims, eforms for uniform instrument permitting enforcement (UIPE) and for uniform notification form (UNF);

direct taxation related systems, in particular taxation on savings system, taxation on saving test tool, eforms for direct taxation, tax identification number TIN-on-the-web, the exchanges related to the Article 8 of Directive 2011/16/EU and associated test tools;

other taxation related systems, in particular, the taxes in Europe database (TEDB);

the excise systems, in particular the system for exchange of excise data (SEED), the Excise Movement and Control System (EMCS), MVS eforms, test application (TA);

other central systems, in particular, the member states Taxation information and communication System (TIC), the self-service testing system (SSTS), taxation related statistics system, the central application for web forms, the central services / management information system for Excise (CS/MISE).

2. The Union components of the European information systems are:

IT assets such as the hardware, the software and the network connections of the systems including the associated data infrastructure;

IT services necessary to support the development, the maintenance, the improvement and the operation of the systems;

and any other elements which, for reasons of efficiency, security and rationalisation, are identified by the Commission as common to participating countries.

39.

LEGISLATIVE FINANCIAL STATEMENT


40.

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE


41.

1.1. Title of the proposal/initiative


42.

1.2. Policy area(s) concerned in the ABM/ABB structure


43.

1.3. Nature of the proposal/initiative


44.

1.4. Objective(s)


45.

1.5. Grounds for the proposal/initiative


46.

1.6. Duration and financial impact


47.

1.7. Management method(s) envisaged


48.

2. MANAGEMENT MEASURES


49.

2.1. Monitoring and reporting rules


50.

2.2. Management and control system


51.

2.3. Measures to prevent fraud and irregularities


52.

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE


53.

3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s) affected


54.

3.2. Estimated impact on expenditure


55.

3.2.1. Summary of estimated impact on expenditure


56.

3.2.2. Estimated impact on operational appropriations


57.

3.2.3. Estimated impact on appropriations of an administrative nature


58.

3.2.4. Compatibility with the current multiannual financial framework


59.

3.2.5. Third-party participation in financing


60.

3.3. Estimated impact on revenue


LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS

61.

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE


62.

1.1. Title of the proposal/initiative


Proposal for a Regulation of the European Parliament and of the Council establishing an action programme for taxation in the European Union for the period 2014-2020 (Fiscalis 2020) and repealing Decision N°1482/2007/EC.

1.2. Policy area(s) concerned in the ABM/ABB structure[33]

63.

1405 Taxation Policy


64.

1.3. Nature of the proposal/initiative


¨ The proposal/initiative relates to a new action

¨ The proposal/initiative relates to a new action following a pilot project/preparatory action[34]

65.

X The proposal/initiative relates to the extension of an existing action


¨ The proposal/initiative relates to an action redirected towards a new action

66.

1.4. Objectives


67.

1.4.1. The Commission's multiannual strategic objective(s) targeted by the proposal/initiative


The proposed programme will contribute to the Europe 2020 Strategy for smart, sustainable and inclusive growth[35] by i strengthening the functioning of the Single Market, i providing a framework to support activities enhancing productivity of the public sector and pushing technical progress and innovation in national and European tax administrations.

The programme will in particular support the flagship initiative on the digital agenda for Europe[36], the flagship initiative on the Innovation Union[37] and the flagship initiative on an industrial policy for the globalisation era[38]. It will support the national tax administrations to become fully-fledged e-tax administrations and also contributing to the reduction of the administrative burden on taxpayers, by making the implementation of Union tax legislation smarter.

The programme will also support the Single Market Act[39] in particular some key areas for taxation policy emphasised in this legal act and those concerning diminishing the burden on taxpayers. The upcoming policy initiatives which the programme will support and help implement, such as the proposed Energy Tax Directive, new VAT strategy, and Common Consolidated Corporate Tax Base for companies and those concerning the removal of cross-border tax obstacles for citizens, will, when adopted, contribute substantially to achieving objectives of the Single Market Act.

68.

1.4.2. Specific objective(s) and ABM/ABB activity(ies) concerned


Specific objectives and ABM/ABB activity(ies) concerned

The ABB activity concerned is Taxation Policy (1405).The specific objectives of the programme will be the following:

69.

To improve the operation of the taxation systems, in particular through cooperation between participating countries, their tax authorities, their officials and external experts


70.

1.4.3. Expected result(s) and impact


Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

The proposed programme aims to improve cooperation between tax administrations and provide mechanisms and means for improving such cooperation as well as the necessary funding to achieve these objectives. As such the programme will not, when implemented by the Commission, result in a further harmonisation of national tax systems but it will allow the reduction of negative effects related to the co-existence of 27 different tax systems, such as fraud, distortions of competition, administrative burden for administrations and businesses, tax shopping, etc. The proposed measure is therefore a clear internal market support measure as it will allow the improvement of the functioning of the various tax systems within the internal market

Whereas it is the Member States' responsibility to manage the operation of national tax systems, it is clear from the challenges identified in the impact assessment of the proposal that increased administrative cooperation between tax authorities –to an even greater degree than is currently the case - is necessary. Cooperation across the EU enables tax authorities to develop synergies, avoid duplication and exchange good practice in all fields related to taxation such as business engineering, IT, international cooperation, etc. The support to taxation cooperation by the current Fiscalis 2013 programme has demonstrated its merits, and this experience will be very valuable to respond to the future challenges in particular the outdated technological architecture, difficulties in working together on an operational level with regard to specific tasks, unequal financial means to support the activities of tax authorities and difficulties in establishing structural collaboration with the main stakeholders of the tax authorities.

71.

1.4.4. Indicators of results and impact


Specify the indicators for monitoring implementation of the proposal/initiative.

Monitoring of the programme's activities will be carried out in order to ensure that the rules and procedures for the implementation of the programme have been applied properly and to verify if the programme is successful in achieving its objectives. A monitoring framework will be put in place, including: an intervention logic, a comprehensive set of indicators, measurement methods, a data collection plan, a clear and structured reporting and monitoring process and midterm and final evaluations.

The performance of the programme will be measured using a coherent set of performance, impact, result and output indicators linked to the general and specific objectives and priorities of the programme and building the link with the Commission Management Plan. The detailed list of impact, result and output indicators is available in the Impact Assessment. DG TAXUD has identified targets for some outputs of the programme. For some others though this is not yet feasible at this point in time. The targets of those outputs will be identified before the start of the Fiscalis 2020 programme by DG TAXUD and presented to the programme Committee for endorsement in the framework of the Annual Work programme procedure.

The general and specific objective will be measured among others through the availability of the Common Communication Network for the European Information systems and will have as target a 97% availability.

72.

1.5. Grounds for the proposal/initiative


73.

1.5.1. Requirement(s) to be met in the short or long term


The proposal contributes to the Europe 2020 strategy and the implementation of various other Union legislations as elaborated under chapter 1.4.1

74.

1.5.2. Added value of EU involvement


It is more beneficial to initiate actions at the Union level than at the level of 27 Member States as described in detail in chapter 3.2 of the explanatory memorandum.

75.

1.5.3. Lessons learned from similar experiences in the past


From an economic point of view, action at EU level is much more efficient. The backbone of the taxation cooperation is a highly secured dedicated communication network which is operational since the first tax cooperation programmes in the early 90's. It interconnects national tax administrations in approximately 5.000[40] connection points. This common IT network ensures that every national administration only needs to connect once to this common infrastructure to be able to exchange any kind of information. If such an infrastructure were not available tax administrations in the Member States would have to link 26 times to the national systems of each of the other Member States.

Other cornerstones of the programme are activities that bring taxation officials together with the purpose of exchanging best practices, to learn from each other, analyse a problem or draft a guide, for instance. If Member States would have had to learn from each other by developing their own activities outside the programme umbrella, they would all have developed their own set of tools and ways of work. Synergies between activities would have been lost and common activities would not have been implemented systematically at the level of 27 Member States. It is much more efficient to have, with the support of the programme, the Commission acting as activity broker between the participating countries.

Another important value added is one of an intangible nature. The programme has been instrumental in creating a sense of common interest, stimulating mutual trust and generating a cooperation spirit between Member States and Member States and the Commission in the area of taxation.

76.

1.5.4. Coherence and possible synergy with other relevant instruments


The management of the Fiscalis 2020 and Customs 2020 programmes will be aligned whenever possible. The programmes share a common network for the implementation of European IT Systems, a common platform for online collaboration (PICS) and a common tool for the Activity Reporting (ART2). Methodologies applied for the Human Capacity Building are also shared between the two programmes.

The Midterm evaluation of the DG HOME programmes on Prevention of and Fight against Crime (ISEC) and Prevention, Preparedness and Consequence Management of Terrorism & other Security Related Risks (CIPS)[41] considers the Customs and Fiscalis 2013 programme management model 'offers the most promising prospects for improving the management of ISEC/CIPS as it allows to promptly and flexibly respond to operational needs'.

The backbone for trans-European IT systems is the CCN/CSI network, also being used by OLAF for the exchange (and storage) of information on irregularities and fraud. For this purpose both DGs benefit from economies of scale.

77.

1.6. Duration and financial impact


X Proposal/initiative of limited duration

– ¨ Proposal/initiative in effect from 01/01/2014 to 31/12/2020

– X Financial impact 2014 to 2023 (from 2021 to 2023 only for payment appropriations

¨ Proposal/initiative of unlimited duration

– Implementation with a start-up period from YYYY to YYYY,

– followed by full-scale operation.

1.7. Management mode(s) envisaged[42]

78.

X Centralised direct management by the Commission


¨ Centralised indirect management with the delegation of implementation tasks to:

¨ executive agencies

¨ bodies set up by the Communities[43]

¨ national public-sector bodies/bodies with public-service mission

¨ persons entrusted with the implementation of specific actions pursuant to Title V of the Treaty on European Union and identified in the relevant basic act within the meaning of Article 49 of the Financial Regulation

¨ Shared management with the Member States

¨ Decentralised management with third countries

¨ Joint management with international organisations (to be specified)

If more than one management mode is indicated, please provide details in the 'Comments' section.

79.

Comments


/

80.

2. MANAGEMENT MEASURES


81.

2.1. Monitoring and reporting rules


Specify frequency and conditions.

Monitoring of the programme's activities will be carried out in order to ensure that the rules and procedures for the implementation of the programme have been applied properly (audit function). The proposals for joint action activities are monitored on a permanent basis through an online database, Activity Reporting Tool (ART2), which contains the proposals and their corresponding activities. The same tool allows the beneficiaries of the grants issued under the programme, namely the Member States tax administrations, to report online the expenses financed from the grant to participate in the joint action activities. Annually Member States have to sent a financial report to the Commission which using the Activity Reporting Tool.

For the IT and Training Capacity Building activities that are financed through procurement, the standard reporting and monitoring rules apply.

The programme will be evaluated twice. The results of the midterm evaluation will be available by mid-2018 and those of the final evaluation of the programme towards the end of 2021. Member States, as main beneficiaries of the programme will do an important part of the data collection either by providing information at the level of the individual tools (mainly through ART2) or on the wider impact of the programme (either by participating in perception measuring exercises or through the issuing of reports).

Up to now, evaluation exercises of the existing programmes, predominantly addressed primary stakeholders of the programme, namely tax authorities and their experts which are the target audience of the programme. Considering the importance of consulting also stakeholders that are external to the programme (i.e. economic operators) on the impacts the programme has on them and to what extent they benefit for instance from better cooperation between /tax administrations, this dimension of indirect impacts will be included in future programme evaluations.

82.

2.2. Management and control system


83.

2.2.1. Risk(s) identified


The potential risks for the implementation of the grants are related to:

– Incorrect implementation of the grant agreement signed with the consortium of the Member States and Candidate Countries. The level of risk is considered low, since the beneficiaries are public administrations of the participating countries

– Member States declare expenses for an activity that is not approved under the programme

– Member States declare twice the same expenses

The potential risks for the implementation of the contracts are related to :

– Non-respect of procurement rules

– Payment of an invoice for a non-existing deliverable

84.

2.2.2. Control method(s) envisaged


The main elements of the control strategy applied are:

1. Financial controls common for all expenditure areas:

Ex-ante verification of commitments:

All commitments in DG TAXUD are verified by the head of the HR and Finances Unit. Consequently, 100% of the committed amounts are covered by the ex-ante verification. This procedure gives a high level of assurance as to the legality and regularity of transactions.

Ex-ante verification of payments:

All payments are ex-ante verified according to financial regulations and established procedures. This in-depth control is performed by a financial verificator and an authorizing officer.

In addition at least one payment (from all categories of expenditures) per week is randomly selected for ex-ante in-depth verification performed by the head of the HR and Finances Unit. There is no target concerning the coverage, as the purpose of this verification is to check payments 'randomly' in order to verify that all payments were prepared in line with the requirements. The remaining payments are processed according to the rules in force on a daily basis.

Declarations of the AOSD:

All the Authorising Officers by Sub-Delegations sign declarations supporting the Annual Activity Report for the year concerned. These declarations cover the operations under the programme. The AOSD declare that the operations connected with the implementation of the budget have been executed in accordance with the principles of the sound financial management, that the management and control systems in place provided satisfactory assurance concerning the legality and regularity of the transactions and that the risks associated to these operations have been properly identified, reported and that mitigating actions have been implemented.

2. Additional controls for procurement contracts:

The control procedures for procurement defined in the Financial Regulation are applied. Any procurement contract is established following the established procedure of verification by the services of the Commission for payment, taking into account contractual obligations and sound financial and general management. Anti-fraud measures (controls, reports, etc.) are foreseen in all contracts concluded between the Commission and the beneficiaries. Detailed terms of reference are drafted and form the basis of each specific contract. The acceptance process follows strictly the TAXUD TEMPO methodology: deliverables are reviewed, amended if necessary and finally explicitly accepted (or rejected). No invoice can be paid without an 'acceptance letter'.

The procedure of ordering and accepting deliverables covers also assets management. Each asset is ordered and consequently accepted and encoded into corporate IT tool of the European Commission (ABAC assets) in its acquisition value. The depreciation is automatic based on accounting rules of the Commission.

85.

Technical verification for procurement


DG TAXUD performs controls of deliverables and supervises operations and services carried out by contractors. It also conducts quality and security audits of their contractors on a regular basis. Quality audits verify the compliance of the contractors' actual processes against the rules and procedures defined in their quality plans. Security audits focus on the specific processes, procedures and set-up.

86.

Ex-post administrative control on both operational and financial side


At the end of each contract, the whole file is verified by both operational and financial units before it is formally closed.

87.

3. Additional controls for grants


The grant agreement signed by the beneficiaries of the programme (tax administrations in Member States and Candidate Countries) defines conditions applying to the financing of activities resorting under the grant, including a chapter on control methods. All participating administrations engaged themselves to respect Commission's financial and administrative rules on expenses.

The activities for which grant beneficiaries can finance participation from the grants are identified in an online database (ART2 – Activity Reporting Tool). The Member States report their spending in the same database which has a number of built in controls to reduce errors. For instance, Member States can only report expenses for activities to which they were invited and can only do so once.

In addition to the controls that are built-in in the reporting system, DG TAXUD performs paper controls and on the spot checks on a sample basis.These controls are performed ex-post and based on risk-based sampling.

This control strategy allows keeping the administrative burden on the grant beneficiaries as limited as possible and proportionate to the budget allocated and risks perceived.

The effect of simplification measures, such as replacing real costs by lump sums, is likely to be marginal in terms of budgetary gains. Its main benefit will be at the level of efficiency gains and reduced administraive burden both in Member States and at the Commission.

88.

4. Costs and benefits of the controls


The controls established enable DG TAXUD to have sufficient assurance of the quality and regularity of the expenditure and reduce the risk of non-compliance. The depth of the assessment reaches level three[44] for Joint Actions and level four[45] for the procurement contracts. The benefit of the above control strategy measures is the reduction of the potential risks below 2 % of the overall budget and it reaches all beneficiaries. Any additional measures for further risk reduction would result in disproportionate high costs and are therefore not envisaged. DG TAXUD considers there are no variations between the present and current programme from control point of view and will apply the same control strategy for the 2020 programme. The costs entailed to implement the above control strategy are limited to 2,60 %[46] of the total budget and is expected to remain at the same ratio.

The programme control strategy is deemed efficient to limit the risk of non-compliance to below 2% and proportionate with the risks entailed.

89.

2.3. Measures to prevent fraud and irregularities


Specify existing or envisaged prevention and protection measures.

In addition to the application of all regulatory control mechanisms, the DG will devise an anti-fraud strategy in line with the Commission's new anti-fraud strategy (CAFS) adopted on 24 June 2011 in order to ensure inter alia that its internal anti-fraud related controls are fully aligned with the CAFS and that its fraud risk management approach is geared to identify fraud risk areas and adequate responses. Where necessary, networking groups and adequate IT tools dedicated to analysing fraud cases related to the Fiscalis 2020 programme will be set up.

90.

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE


91.

3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s) affected


· Existing expenditure budget lines

In order of multiannual financial framework headings and budget lines.

Heading of multiannual financial framework| Budget line| Type of expenditure| Contribution

Number [Description………………………...……….]| Diff./non-diff. ([47])| from EFTA[48] countries| from candidate countries[49]| from third countries| within the meaning of Article 18(1)(aa) of the Financial Regulation

|||||||

· New budget lines requested

In order of multiannual financial framework headings and budget lines.

Heading of multiannual financial framework| Budget line| Type of expenditure| Contribution

Number [Heading……………………………………..]| Diff./non-diff.| from EFTA countries| from candidate countries| from third countries| within the meaning of Article 18(1)(aa) of the Financial Regulation

|||||||

14.04.04 – Fiscalis Diff.| NO| YES| NO| NO

14.01.04.05 Fiscalis 2020 – Expenditure on administrative management| Non-diff| NO| NO| NO| NO

3.2. Estimated impact on expenditure[50]

92.

3.2.1. Summary of estimated impact on expenditure


The costs related to the possible introduction of a new European IT system, should this be required, implementing the proposal on the Financial Transaction Tax (FTT), are not included in the budget of the Fiscalis 2020 programme, considering the early stage of the process for the FTT proposal.

93.

EUR million (to 3 decimal places)


Heading of multiannual financial framework:| Smart and Inclusive Growth

DG: TAXUD||| Year Year Year Year Year Year Year Year 2021-| TOTAL

Ÿ Operational appropriations||

14.0404 – Fiscalis Commitments| (1a)| 33.| 33.| 33.| 33.| 33.| 33.| 33.|| 233.670

Payments| (2a)| 9.| 24.| 27.| 30.| 30.| 30.| 30.| 52.| 233.670

Appropriations of an administrative nature financed from the envelope for specific programmes[51]||

14.|| | 0.| 0.| 0.| 0.| 0.| 0.| 0.|| 0.700

TOTAL appropriations for DG TAXUD| Commitments| =1+1(a)+| 33.| 33.| 33.| 33.| 33.| 33.| 33.|| 234.370

Payments| =2+2(a)+| 9.| 24.| 27.| 30.| 30.| 30.| 30.| 52.| 234.370

Ÿ TOTAL operational appropriations| Commitments| | 33.| 33.| 33.| 33.| 33.| 33.| 33.|| 233.670

Payments| | 9.| 24.| 27.| 30.| 30.| 30.| 30.| 52.| 233.670

Ÿ TOTAL appropriations of an administrative nature financed from the envelope for specific programmes| | 0.| 0.| 0.| 0.| 0.| 0.| 0.|| 0.700

TOTAL appropriations under HEADING 1 of the multiannual financial framework| Commitments| =4+ 33.| 33.| 33.| 33.| 33.| 33.| 33.|| 234.370

Payments| =5+ 9.| 24.| 27.| 30.| 30.| 30.| 30.| 52.| 234.370

Heading of multiannual financial framework:| ' Administrative expenditure '

94.

EUR million (to 3 decimal places)


|||| Year Year Year Year Year Year Year TOTAL

95.

DG: TAXUD|


Ÿ Human resources| 4.| 4.| 4.| 4.| 4.| 4.| 4.| 34.811

Ÿ Other administrative expenditure| 0.| 0.| 0.| 0.| 0.| 0.| 0.| 1.540

TOTAL DG TAXUD|| 5.| 5.| 5.| 5.| 5.| 5.| 5.| 36.351

TOTAL appropriations under HEADING 5 of the multiannual financial framework| (Total commitments = Total payments)| 5.| 5.| 5.| 5.| 5.| 5.| 5.| 36.351

|||| Year Year Year Year Year Year Year Year 2021-| TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework| Commitments| 38.| 38.| 38.| 38.| 38.| 38.| 38.|| 270.721

Payments| 14.| 29.| 32.| 35.| 35.| 35.| 35.| 52.| 270.721

96.

Estimated impact on operational appropriations


– The proposal requires the use of operational appropriations, as explained below:

97.

Commitment appropriations in EUR million (to 3 decimal places)


Indicate objectives and outputs ò||| | TOTAL

98.

OUTPUTS


Type of output[52]| Average cost of the output| Number of outputs| Cost| Number of outputs| Cost| Number of outputs| Cost| Number of outputs| Cost| Number of outputs| Cost| Number of outputs| Cost| Number of outputs| Cost| Total number of outputs| Total cost

99.

Specific Objective: To improve the operation of the taxation systems in particular through cooperation between participating countries, their tax administrations, their officials and external experts


IT Capacity Building| Number of IT contracts|| Around 23.|| 23.|| 23.|| 23.|| 23.|| 23.|| 23.|| 164.150

Joint Actions| Number of events organised|| Around 8.|| 8.|| 8.|| 8.|| 8.|| 8.|| 8.|| 59.850

Human Capacity Building| Number of trainings|| Tbc| 1.|| 1.|| 1.|| 1.|| 1.|| 1.|| 1.|| 9.670

|||||||||||||||||

TOTAL COST|||| 33.|| 33.|| 33.|| 33.|| 33.|| 33.|| 33.|| 233.670

100.

3.2.2. Estimated impact on appropriations of an administrative nature


101.

3.2.2.1. Summary


– The proposal requires the use of administrative appropriations, as explained below:

102.

EUR million (to 3 decimal places)


|| Year Year Year Year Year Year Year TOTAL

HEADING 5 of the multiannual financial framework||||||||

Human resources| 4.| 4.| 4.| 4.| 4.| 4.| 4.| 34.811

Other administrative expenditure| 0.| 0.| 0.| 0.| 0.| 0.| 0.| 1.540

Subtotal HEADING 5 of the multiannual financial framework| 5.| 5.| 5.| 5.| 5.| 5.| 5.| 36.351

Outside HEADING 5[53] of the multiannual financial framework||||||||

Human resources| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

Other expenditure of an administrative nature| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

Subtotal outside HEADING 5 of the multiannual financial framework| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

TOTAL| 5.| 5.| 5.| 5.| 5.| 5.| 5.| 36.351

103.

3.2.2.2. Estimated requirements of human resources


– The proposal requires the use of human resources, as explained below:

104.

Estimate to be expressed in full amounts (or at most to one decimal place)


|| Year Year Year Year Year Year Year 2020

Ÿ Establishment plan posts (officials and temporary agents)

14 01 01 01 (Headquarters and Commission’s Representation Offices)| 32

14 01 01 02 (Delegations)| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

14 01 05 01 (Indirect research)| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

10 01 05 01 (Direct research)| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

Ÿ External personnel (in Full Time Equivalent unit: FTE)[54]

14 01 02 01 (CA, INT, TA, SNE from the 'global envelope')| 9

14 01 02 02 (CA, INT, JED, LA and SNE in the delegations)| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

14 01 04 05 [55]| - at Headquarters[56]| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

- in delegations| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

14 01 05 02 (CA, INT, SNE - Indirect research)| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

10 01 05 02 (CA, INT, SNE - Direct research)| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

Other budget lines (specify)| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.| p.m.

TOTAL| 41

14 is the policy area or budget title concerned.

The human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.

Description of tasks to be carried out:

Officials and temporary agents| Programme management activities, stricto senso[57], and programme implementation activities such as studies, development, maintenance and operation of European IT systems

External personnel| Assistance to programme implementation activities such as studies, development, maintenance and operation of European IT systems

105.

3.2.3. Compatibility with the current multiannual financial framework


– The proposal is compatible the 2020 multiannual financial framework.

106.

3.2.4. Third-party contributions


– The proposal does not provide for co-financing by third parties

107.

3.2.5. Estimated impact on revenue


– The proposal has potentially limited financial impact on revenue: in case the penalties (mentioned in article 13) are applied, these will be budgeted as general revenue for the EU budget

[1] COM(2011)500 Final of 29 June 2011, A budget for Europe 2020.

[2] COM(2010) 2020 final of 3 March 2010: A strategy for smart, sustainable and inclusive growth.

[3] Fiscalis 2013 midterm evaluation: ec.europa.eu/taxation_customs/resources/documents _

[4] DELOITTE, The future business architecture for the Customs Union and Cooperative Model in the Taxation Area in Europe.

[5] Minutes of the 9th Fiscalis Committee meeting on 3 May 2011

[6] Customs and Taxation connection points taken together

[7] COM(2012) 388 final

[8] Previously called Trans European IT Systems

[9] OJ L 55, 28.2.2011, p 13.

[10] The Evaluation Partnership, Customs 2013 midterm evaluation, page 72 to 80 RAMBOLL, Fiscalis 2013 midterm evaluation, paragraphs 268-305.

[11] COM(2011), 398 Final of 29 June 2011.

[12] COM(2011), 706 Final of 9 November 2011.

[13] COM(2010) 245 Final/2, A Digital Agenda for Europe.

[14] COM(2010) 546 of 6 October 2010, European 2020 Flagship Initiative Innovation Union.

[15] COM(2010) 682 of 23 November 2010, An Agenda for new skills and jobs.

[16] COM(2010) 614, European 2020 Flagship Initiative Integrated Industrial Policy.

[17] COM(2011) 0206 final.

[18] OJ C , , p. .

[19] Reference to Final/Mid Term Evaluation(s)

[20] COM(2010) 2020.

[21] OJ L 84, 31.3.2010, p. 1.

[22] COM(2004)373

[23] To be completed

[24] COM(2010)700

[25] OJ 28.2.2011 L 55-13

[26] OJ L 330, 15.12.2007, p. 1

[27] OJ L 347, 11.12.2006, p. 1

[28] OJ L 316, 31.10.1992, p. 21

[29] OJ L 176, 5.7.2011, p. 24

[30] OJ L 283, 31.10.2003, p. 51

[31] OJ L 84, 31.3.2010, p. 1.

[32] OJ L 292, 15.11.1996, p. 2.

[33] ABM: Activity-Based Management – ABB: Activity-Based Budgeting.

[34] As referred to in Article 49(6)(a) or (b) of the Financial Regulation.

[35] COM(2010) 2020 final of 3 March 2010: A strategy for smart, sustainable and inclusive growth.

[36] COM(2010) 245 Final/2, A Digital Agenda for Europe.

[37] COM(2010) 546 of 6 October 2010, European 2020 Flagship Initiative Innovation Union.

[38] COM(2010) 614, European 2020 Flagship Initiative Integrated Industrial Policy.

[39] COM(2011) 0206 final.

[40] Customs and Taxation connection points taken together.

[41] COM(2005) 124 of 6 April 2005 has a budget of 745 million euro in the 2007-2013 financial framework.

[42] Details of management modes and references to the Financial Regulation may be found on the BudgWeb site: www.cc.cec/budg/man/budgmanag/budgmanag_en

[43] As referred to in Article 185 of the Financial Regulation.

[44] Depth of controls – level three: control with reference to fully independent corroborative information

[45] Depth of controls – level four: control with reference to and including access to the underlying documentation that is available at the stage of the process in question.

[46] The cost comprises the number of FTE performing the controls multiplied by average staff cost; expenditure linked to external audits, expenditure linked to maintenance of ART system.

[47] Diff. = Differentiated appropriations / Non-diff. = Non-Differentiated Appropriations

[48] EFTA: European Free Trade Association.

[49] Candidate countries and, where applicable, potential candidate countries from the Western Balkans.

[50] Expenditure is expressed in current prices.

[51] Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former 'BA' lines), indirect research, direct research.

[52] Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).

[53] Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former 'BA' lines), indirect research, direct research.

[54] CA= Contract Agent; INT= agency staff ("Intérimaire"); JED= 'Jeune Expert en Délégation' (Young Experts in Delegations); LA= Local Agent; SNE= Seconded National Expert;

[55] Under the ceiling for external personnel from operational appropriations (former 'BA' lines).

[56] Essentially for Structural Funds, European Agricultural Fund for Rural Development (EAFRD) and European Fisheries Fund (EFF).

[57] The number of posts involved in programme management activities strictu senso is limited to 18.