Considerations on COM(2022)703 - Amendment of Regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age

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dossier COM(2022)703 - Amendment of Regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital ...
document COM(2022)703 EN
date March 11, 2025
 
table>(1)Council Regulation (EU) No 904/2010 (3) lays down the conditions under which the competent authorities in the Member States responsible for the application of the laws on value added tax (VAT) are to cooperate with each other and with the Commission to ensure compliance with those laws. Those conditions entail, among others, rules on the storage and exchange, through electronic means, of information that could help to effect a correct assessment of VAT, monitor the correct application of VAT, particularly on intra-Community transactions, and combat VAT fraud.
(2)Council Directive (EU) 2025/516 (4) introduced into Council Directive 2006/112/EC (5) digital reporting requirements. Those requirements oblige taxable persons identified for VAT purposes to submit to Member States information on each intra-Community supply of goods, on each supply of a service that is taxable in a Member State other than that in which the supplier is established and, unless the Member State has made use of the option to exclude taxable persons from the obligation, on each intra-Community acquisition of goods and on each acquisition of services that is taxable and for which the recipient is liable to pay VAT. The exchange and processing of that information on intra-Community transactions assists Member States in monitoring the correct application of VAT and in detecting fraud.

(3)The existing cooperation between the tax authorities of Member States is based on exchanging aggregated information between national electronic systems. The introduction of digital reporting requirements aims to increase tax collection by providing transaction-by-transaction data to tax administrations in a timely manner. To make such data available to other tax administrations in an efficient manner, and to facilitate the common implementation, as well as a common interpretation, of analyses and crosschecks, a central system where VAT information is shared is necessary.

(4)In order to enable Member States to fight VAT fraud more effectively, the Commission should establish an electronic central VAT information exchange system (‘central VIES’) for sharing VAT information. Each Member State should establish a national electronic system to automatically transmit to the central VIES information about intra-Community transactions as reported by the respective suppliers and acquirers in different Member States. Member States should also automatically transmit to the central VIES the VAT identification information of taxable persons making intra-Community transactions, including other VAT identification numbers issued to a person. Furthermore, whenever data are changed, Member States should upload the metadata for tracking the modification time into the central VIES as well.

(5)Member States should automatically update the VAT identification information of taxable persons making intra-Community transactions in the central VIES without delay whenever identification information changes, except where Member States agree that such update is not pertinent, essential or useful. Such updates are necessary because the validity of the VAT identification numbers of taxable persons is subject to verification as regards the condition for exempting intra-Community supplies provided for in Article 138 of Directive 2006/112/EC. To provide a reasonable level of assurance to tax administrations with regard to the quality and reliability of such information, Member States should automatically update information on intra-Community transactions in the central VIES no later than 1 day after the Member State received the information from the taxable person.

(6)Furthermore, with regard to VAT identification information in the central VIES, Member States should adopt measures to ensure that the respective Member State assesses whether the data provided by taxable persons for their identification for VAT purposes in accordance with Article 214 of Directive 2006/112/EC are complete and accurate. Moreover, Member States should ensure that the VAT identification number is shown as invalid in the central VIES where a taxable person fails to respect the obligations to communicate data, where the economic activity has ceased or where the competent authority considers that the taxable person has ceased such activity.

(7)The information on intra-Community transactions reported by the suppliers and acquirers in different Member States should be entered by each Member State into the central VIES promptly after the Member State has received it. It is necessary to process the information received quickly, for technical reasons related to the data volume as well as to detect suspicious transactions and possible cases of VAT fraud early.

(8)To assist Member States in their fight against VAT fraud and to detect fraudsters, VAT identification information and VAT information on intra-Community transactions should be available in the central VIES for 10 years. That period constitutes the minimum period necessary for Member States to carry out controls effectively and investigate suspected VAT fraud or detect such fraud. It is also proportionate considering the massive volume of the intra-Community transaction information and the sensitivity of the information as commercial and personal data.

(9)To detect mismatches in a timely manner and thereby improve the capability to fight VAT fraud, the central VIES should be able to automatically cross-check the information collected from both the supplier and acquirer through the digital reporting requirements introduced by Directive (EU) 2025/516 to Directive 2006/112/EC. The central VIES should also be able to make available the results of such cross-checking to Member States for the appropriate follow-up.

(10)Furthermore, to allow the central VIES to maintain the capabilities of the existing VAT information exchange system provided for in Article 17(1), point (a), of Regulation (EU) No 904/2010, the central VIES should also be able to aggregate information to provide an overview of supplies and acquisitions reported by taxable persons located in Member States. To ensure that the central VIES permits Member States to continue accessing each other’s information as currently structured within the existing VAT information exchange system, the central VIES should support data aggregation.

(11)To support the competent authorities of Member States in effecting a correct assessment of VAT, monitoring the correct application of VAT, combating VAT fraud and exploiting the synergies between different information systems containing information relevant for VAT purposes, the central VIES should process information received from Member States together with any information communicated or collected pursuant to Regulation (EU) No 904/2010.

(12)Access to the information in the central VIES should be provided on a need-to-know basis. Allowing access to sensitive data to those users for which it is foreseeably relevant should be enforced with access permissions and access logs that safeguard the information in the central VIES. That information should not be used for purposes other than the monitoring of the correct application of VAT and the combating of VAT fraud. All users are to be bound by the confidentiality rules laid down in Article 55 of Regulation (EU) No 904/2010.

(13)To fight VAT fraud, Eurofisc liaison officials of Member States as referred to in Article 36 of Regulation (EU) No 904/2010 should be able to access and analyse VAT information on intra-Community transactions. To monitor the correct application of VAT laws, officials of Member States who check whether the exemption of VAT for certain imported goods, which is laid down in Article 143(1), point (d), of Directive 2006/112/EC, applies, should also be able to access VAT identification information stored in the central VIES. Moreover, for the same reasons, competent authorities of Member States should select other officials who need to have direct access to the central VIES and grant them such access where needed. Finally, duly accredited persons of the Commission should be able to access the information contained in the central VIES, but only to the extent that such access is necessary for the development and maintenance of that system.

(14)To investigate suspected VAT fraud and to detect such fraud, the information systems supporting the Eurofisc network in the fight against VAT fraud, including the Transaction Network Analysis system and the central electronic system of payment information (‘CESOP’), should have direct access to the central VIES.

(15)The data volume and the frequency of data transmissions to the central VIES render the automation of the information flows from the central VIES to national electronic systems necessary. Such automation should also provide for an efficient and secure machine-to-machine communication channel, and should ensure that there is no longer a need for human intervention when accessing shared data. National electronic systems that transmit information to the central VIES should therefore also have access to the information stored in the central VIES, including the processed and aggregated information for VAT control purposes and for the fight against VAT fraud.

(16)In order to ensure uniform conditions for the implementation of Regulation (EU) No 904/2010, implementing powers should be conferred on the Commission in respect of the tasks to be carried out by the Commission for developing, maintaining, hosting and technically managing the central VIES, the practical arrangements for the identification of officials and electronic systems and the technical details concerning the access of officials and electronic systems to the central VIES, the detailed access permissions of officials and electronic systems to detailed data in the central VIES to which access is to be granted, the technical details and format of the information transmitted to the central VIES and the roles and responsibilities of Member States when acting as controllers and of the Commission when acting as processor under Regulations (EU) 2016/679 (6) and (EU) 2018/1725 (7) of the European Parliament and of the Council. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (8).

(17)VAT fraud is a common problem for all Member States. Member States alone do not have the information necessary to ensure that the VAT rules are correctly applied and to tackle VAT fraud. Since the objective of Regulation (EU) No 904/2010, namely the fight against VAT fraud, cannot be sufficiently achieved by the Member States because of the cross-border nature of the internal market but can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. 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 that objective.

(18)Taxable persons facilitating supplies of goods or services through the use of an electronic interface can be subject to requests for records from the Member State where those supplies are taxable as referred to in Article 242a of Directive 2006/112/EC. To reduce the administrative burden and compliance costs for those taxable persons and to avoid duplication of work, the Member State of identification should coordinate such requests as much as possible. For that purpose, it is necessary to lay down a standard form for the electronic transmission of that information to Member States. However, Member States may, in accordance with Article 242a(2), second subparagraph, of Directive 2006/112/EC, continue to request the records directly from the taxable person, to be provided on a regular and systematic basis until automated access to those records is available.

(19)In order to ensure uniform conditions for the implementation of Regulation (EU) No 904/2010, implementing powers should be conferred on the Commission to adopt the technical details for the standard form, and the technical details, including common electronic messages, for the submission of records by taxable persons facilitating supplies through the use of an electronic interface as referred to in Article 242a of Directive 2006/112/EC. Those powers should be exercised in accordance with Regulation (EU) No 182/2011.

(20)Directive (EU) 2025/516 introduces into Directive 2006/112/EC a one-stop shop (‘OSS’) simplification scheme for taxable persons making cross-border transfers of certain own goods. It is therefore necessary to integrate that scheme into the overall framework of the VAT OSS special schemes set out in Chapter XI, Section 3, of Regulation (EU) No 904/2010. That overall framework should, in particular, include the provision of information between the Member States from and to which the goods are transferred.

(21)As the OSS simplification scheme introduced is comprehensive and encompasses cross-border movements of goods covered by call-off stock arrangements in accordance with Article 17a of Directive 2006/112/EC, those arrangements have been removed from Directive 2006/112/EC. It is necessary for that amendment of Directive 2006/112/EC to be reflected in Article 21 of Regulation (EU) No 904/2010.

(22)The abuse of import OSS (‘IOSS’) VAT identification numbers has been identified by stakeholders as a potential risk. To ensure the correct use of IOSS VAT identification numbers and to make the verification process for such numbers more robust, it is necessary to extend the scope of Article 47h of Regulation (EU) No 904/2010 by granting customs authorities access to information about the IOSS registered trader, thereby improving the risk-management and control capabilities of those customs authorities.

(23)To enhance controls in relation to the IOSS scheme, it is necessary to add the total value of the goods imported under the IOSS scheme per IOSS VAT identification number per Member State of consumption to Article 17(1), point (e), of Regulation (EU) No 904/2010.

(24)This Regulation respects the fundamental rights and observes the principles recognised by the Charter of Fundamental Rights of the European Union (‘the Charter’). In particular, this Regulation ensures full respect for the right to the protection of personal data laid down in Article 8 of the Charter. In that regard, this Regulation strictly limits the amount of personal data that will be made available to the tax authorities. The processing of intra-Community transaction information pursuant to this Regulation should occur only for the purposes of this Regulation.

(25)The European Data Protection Supervisor was consulted in accordance with Article 42(1) of Regulation (EU) 2018/1725 and delivered an opinion on 3 March 2023 (9).

(26)As the implementation of the central VIES system will require new technological developments, it is necessary to defer the application of the provisions related to the central VIES in order to allow Member States and the Commission to develop those technologies.

(27)Automated access to information on intra-Community transactions which have been reported through recapitulative statements directly affects the efficiency of VAT controls. Therefore, the current VAT information exchange system provided for in Article 17(1), point (a), of Regulation (EU) No 904/2010 should be maintained for a period of time after the abolition of those recapitulative statements. Beyond that period, the relevant provisions of the current VAT information exchange system should be deleted and the information reported via recapitulative statements should still be accessible on request.

(28)Regulation (EU) No 904/2010 should therefore be amended accordingly,