The Regulation provides for the exchange of specific information between tax administrations:
- Spontaneous exchange of information takes place if a country discovers information on VAT transactions that may be relevant to another country.
- Exchange of information on request occurs when additional information on VAT transactions is needed from another country.
- Automatic exchange of information is used when the information is relevant for other countries, for example on new means of transport or non-established traders.
- Joint audits and simultaneous controls allow officials from national tax authorities to form international audit teams to control multinational companies.
These information exchanges are coordinated by the Eurofisc network, comprised of liaison officials from the 27 Member States and Norway. The Eurofisc network was launched in 2010 to combat cross-border VAT fraud.
Based on the information shared within the Eurofisc network and after analysis of the available data, Eurofisc liaison officials can take appropriate action at national level, such as proceeding with requests for information, audits or deregistration of VAT numbers.
Eurofisc is mandated to work on the:
- joint processing and analysis of data;
- coordination of follow-up actions;
- access to customs data on VAT exempt importations;
- the possibility to exchange information directly with Europol and OLAF.
In 2019, Eurofisc started to use an electronic system, the Transaction Network Analysis (TNA) tool, to rapidly exchange and jointly process VAT data. TNA enables Eurofisc to detect suspicious networks earlier and more efficiently.
On 8 December 2022, the European Commission proposed the VAT in the Digital Age package which will make the EU's Value-Added Tax (VAT) system more resilient to fraud by embracing and promoting digitalisation. It introduces real-time digital reporting for VAT purposes based on e-invoicing that will give Member States valuable information they need to step up the fight against VAT fraud. Cooperation between the tax administration is also significantly reinforced through the introduction of a new central VAT Information Exchange System (central VIES).
- Proposal to amend Council Regulation on VAT administrative cooperation
- Proposal to amend the VAT Directive
- Further information on the VAT in the Digital Age package
100th meeting of the Standing Committee on Administrative Cooperation
On 21 April 2021, the Standing Committee on Administrative Cooperation held its 100th meeting which discussed the Central Electronic System of Payment information (CESOP), the VAT scheme for Small businesses and the Import One Stop Shop.
The Standing Committee on Administrative Cooperation (SCAC) is composed of officials from national tax administrations and Ministries of Finance. It supports the Commission in the implementation of the legal framework governing administrative cooperation in the field of VAT (Council Regulation (EU) No 904/2010). It is essential for the smooth functioning of the key elements of VAT administrative cooperation:
- Electronic systems such as:
- VAT Information Exchange System (VIES),
- electronic Forms Central Application (eFCA),
- One Stop Shop, the import One Stop Shop, and
- VAT Refund.
The first meeting of SCAC took place on 20 and 21 January 1992 and prepared the VAT arrangements for cross-border transactions that entered into force along the Internal Market in 1993.
More information on the achievements of the European Union in this field over almost 30 years of cooperation in this presentation.
Central Electronic System of Payment information (CESOP)
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.
More information on the implementation of CESOP is available here.