Council Regulation (EU) 2018/1541 of 2 October 2018

What it is

to amend Council Regulation (EU) No 904/2010 on administrative cooperation in the field of VAT as regards the status of certified taxable person. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: in its VAT action plan , the Commission announced its intention to submit a proposal setting out the principles of a definitive value added tax (VAT) system for cross-border business-to-business trade between Member States. The certified taxable person is one of the essential elements of this new definitive VAT system for intra-Union trade. The concept of the certified taxable person should allow or proving that a specific taxable person can be considered as a reliable taxpayer within the Union . PURPOSE: to strengthen cooperation between Member States in the field of value added tax (VAT). BACKGROUND: fighting tax fraud and evasion to help secure national and EU revenues and prevent distortion of competition has been a top Commission priority in recent years. It is estimated that in total about EUR 152 billion was lost in 2015 due to shortcomings in VAT collection, including fraud. Earlier estimates had put the losses due to cross-border fraud alone at EUR 50 billion. In its VAT action plan of 7 April 2016, the Commission outlined the need to put in place a single European VAT area comprising of key measures to be adopted in the short and medium term to modernise the EU VAT system and make it simpler, more fraud-proof and business-friendly. The European Parliament resolution of 24 November 2016 welcomed the VAT Action Plan. Among the short-term measures, the Commission announced its intention to improve the exchange and analysis of information by tax administrations and with other law enforcement bodies, to strengthen Eurofisc and to introduce new tools such as joint audits. The three main types of cross-border fraud are still the most widespread and most significant across the EU: (i) ‘carousel fraud’ (or missing trader intra-Community fraud — MTIC fraud); (ii) used car fraud; and (iii) fraud involving customs procedures. This initiative would add measures specifically designed to tackle these fraud schemes, to Council Regulation (EU) No 904/2010 , the reference legal basis for administrative cooperation and the fight against VAT fraud. It is part of the ‘fair taxation package for the creation of a single EU value added tax area’ set out in the roadmap for a more united, stronger and more democratic Union. jointly processing and analysing data in Eurofisc; improving the operational framework for coordinated checks between Member States; developing the exchange of information and intelligence between Member States’ tax administrations in Eurofisc and law enforcement authorities at EU level; tackling fraud involving the dual VAT regime applicable to cars by improving access to vehicle registration data; sharing information on customs procedures 42 and 63 between customs and tax authorities. It was not possible to precisely assess and quantify the benefits of the main preferred options. However, the main options covered by this…

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