Transmission and exchange of payment data to fight VAT fraud
On 18 February 2020, the Council adopted a legislative package to request payment service providers to transmit information on cross-border payments originating from Member States and on the beneficiary (“the payee”) of these cross-border payments. Under this package, payment service providers offering payment services in the EU will have to monitor the payees of cross-border payments and transmit information on those who receive more than 25 cross-border payments per quarter to the administrations of the Member States
This information will then be centralised in a European database, the Central Electronic System of Payment information (CESOP) where it will be stored, aggregated and cross-checked with other European databases. All information in CESOP will then be made available to anti-fraud experts of Member States via a network called Eurofisc.
The objective of this new measure is to give tax authorities of the Member States the right instruments to detect possible e-commerce VAT fraud carried out by sellers established in another Member State or in a non-EU country.
The measure respects the data protection rules. Only information related to payments that are likely to be connected to an economic activity is transmitted to the tax authorities. Information on consumers and on the reason underlying the payment is not part of the transmission.
The transmission of data must start on 1 January 2024.
In order to implement the proposal, the European Commission works with Member States’ tax administrations and payment service providers in an expert group, which provides assistance with both the implementation of the reporting obligations for payment service providers and the development of CESOP.
Among other activities, the expert group helps the Commission to:
- Create the electronic standard form to transmit data from payment service providers;
- Identify the technical measures for establishing, maintaining and technically managing CESOP;
- Draft guidelines on the reporting obligations;
- Engage with the payment sector and Member States.
The expert group also works in collaboration with an expert team composed of IT experts from Member States, which is developing the technical requirements linked to the establishment of CESOP.
On 24 May 2023, the Commission published the “Call for applications for the renewal of the membership of the Expert Group on the implementation of the package to exchange and transmit payment data to combat VAT fraud” (CESOP EG).
The mission of the group will be:
- to provide expertise to the Commission in developing, operating and maintaining the Central Electronic System of Payment information ("CESOP");
- to provide expertise to the Commission to set-up the business requirements and necessary capabilities for CESOP to be able to perform is functions properly;
- to provide expertise to the Commission regarding the exchange of information between payment service providers, in order to develop the electronic standard form that will be used for the transmission of payment data from payment service providers;
- to provide support to the Commission in the drafting of guidelines for the reporting obligation.
All information on the application can be found in the Commission’s Register of Expert Groups and in the document below.
- XSD User Guide v4.00 and corresponding XSD package
- Council Directive (EU) 2020/284 of 18 February 2020 amending Directive 2006/112/EC as regards introducing certain requirements for payment service providers (OJ L 62, 2.3.2020, p. 7)
- Council Regulation (EU) 2020/283 of 18 February 2020 amending Regulation (EU) No 904/2010 as regards measures to strengthen administrative cooperation in order to combat VAT fraud (OJ L 62, 2.3.2020, p. 1)
- COMMISSION IMPLEMENTING REGULATION (EU) 2022/1504 of 6 April 2022 laying down detailed rules for the application of Council Regulation (EU) No 904/2010 as regards the creation of a central electronic system of payment information (CESOP) to combat VAT fraud
- News on the adoption by the Commission of new measures to fight VAT fraud using payment data
- Annex to Commission Implementing Regulation (EU) of 6 April 2022 laying down detailed rules for the application of Council Regulation (EU) No 904/2010 as regards the creation of a central electronic system of payment information (CESOP) to combat VAT fraud
- Press release on the adoption of the new rules by the Council
- CESOP Expert Group on the Register of Commission Expert Groups