How the EU and its Member States work together to ensure the correct application of VAT rules on cross-border transactions.
VAT and Administrative Cooperation
Based on Council Regulation (EU) No 904/2010, the EU and Member States’ national tax authorities cooperate to help ensure the correct application of VAT rules on cross-border transactions.
The Regulation provides for the exchange of various types of information:
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.
The VAT Information Exchange System is an electronic interface that allows tax administrations to automatically ‘exchange’ some VAT-relevant information on intra-Community supplies
The Eurofisc network, comprised of liaison officials from the 27 Member States and Norway, is in charge of exchanging early warning signals on cross-border fraud and allowing national administrations to take necessary measures to stop the fraud.
As of 1 January 2024, new transparency rules require payment service providers (PSPs) offering services in the EU to monitor the beneficiaries of cross-border payments. The information collected is stored in the Central Electronic System of Payment information (CESOP) and made available to Member States’ anti-fraud experts via Eurofisc.
The Standing Committee on Administrative Cooperation (SCAC) is composed of officials from national tax administrations and Ministries of Finance. It supports the Commission in implementing the legal framework governing administrative cooperation in VAT.
The first meeting of SCAC took place in January 1992 and prepared the VAT arrangements for cross-border transactions that entered into force alongside the Internal Market in 1993.
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.
Having an effective VAT administration with efficient processes and procedures is in everybody’s interest – in the interest of national administrations, of EU institutions, but also in the interest of every taxpayer and citizen.
