Under the new rules, payment service providers (PSPs) offering payment services in the EU will have to monitor the beneficiaries (payees) of cross-border payments.
From 1 April 2024, they must transmit information on those who receive more than 25 cross-border payments per quarter to the administrations of EU Member States.
How will the information be exchanged and stored?
This information will be stored in the Central Electronic System of Payment information (CESOP) database, where it will be aggregated and cross-checked with other European databases. All information in CESOP will be made available to Member States’ anti-fraud experts via Eurofisc, the EU’s network of anti-fraud experts from the 27 Member States and Norway.
These new measures give Member States’ tax authorities the right instruments to detect possible e-commerce VAT fraud carried out by sellers established in another Member State or non-EU country.
In line with data protection rules, only information related to the beneficiaries of more than 25 cross-border payments per quarter is transmitted to tax authorities, together with the information on the amounts of the payments received. Information on consumers and on the purpose of the payment are not part of the transmission.
Implementation
The European Commission works together with EU Member States’ tax administrations and payment service providers in the CESOP Expert Group, which assists in the development of CESOP and the implementation of reporting obligations for payment service providers. They are further supported by CESOP Expert Team – a team of IT experts from Member States which developed the technical requirements needed to set up CESOP.
Among other activities, the expert group helped to:
- Create the electronic standard form to transmit data from payment service providers
- Identify technical measures for establishing, maintaining and technically managing CESOP
- Draft guidelines on the reporting obligations
- Engage with the payment sector and Member States
Guidelines and FAQs
The Commission, together with a team of experts, has drafted guidelines to facilitate the implementation of CESOP requirements.
These guidelines are complemented by a list of frequently asked questions (FAQs), drafted based on questions received from Payment Service Providers and Member State authorities. The FAQs provide practical information, have no legal value and are subject to ongoing updates.
Both documents are published in English. Translation in all official EU languages is foreseen in the first half of 2024.
Legal texts
- 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
- 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
Technical files
The European Commission has created a set of resources and technical documents to streamline the exchange of payment information. This includes:
- An XML Schema that defines the format for payment data used by Payment Service Providers and its relative User Guide, that how to use the XML Schema
- A Validation Module (with a manual) that checks if data complies with the XML Schema
Additional resources are also made available for PSPs. They include further clarifications, explanations and answer to technical questions, a list of known errors, deprecated version etc – Please see CESOP public group on CIRCABC