Exchange of VAT-relevant payment data VAT forum 19 February 2018 European Commission TAXUD

VAT Action Plan: 2016 COM(2016)148 final Background VAT Action Plan: 2016 COM(2016)148 final Simplifications and robust VAT system on cross border B2C supplies VAT e-commerce package: Directive EU 2017/2455 Detection of "non-compliance" FPG038 expert group of tax authorities on e-commerce control FWS068 Workshop in 2016 e-commerce control VAT forum sub-group on e-commerce

EU Commission initiative on payment data: problem tree General problem: VAT loss Specific problems: Lack of detection tools Loopholes to exchange data Legal uncertainty for payment intermediaries Expected impact: Reduction VAT fraud Level playing field for businesses

Why "follow the money" No physical presence of the supplier Almost 100% of online purchases use payment intermediaries Alternative approaches: Follow the goods Internet monitoring Administrative cooperation FIU … Other field of taxation experiences: DAC and Saving Directive

Cross-border B2C supplies of services and goods Scope Cross-border B2C supplies of services and goods Detection remote suppliers (within the EU or outside the UE) Detection undeclared or under-declared supplies Detection of wrong place of consumption Data protection Limited access to data Confidentiality Limited storage of data Limited set of data Only data referring to VAT loss Outside the scope Enforcement (recovery, precautionary measures, JSL, international agreements…)

Commission approximate timeline January 2018 – May 2018 Impact assessment on 3 options Option 1: baseline Option 2: non-regulatory solution Option 3: regulatory solution Targeted consultation VAT forum sub-group on e-commerce Eurofisc WF5 Open Public consultation June 2018 – adoption of the Commission initiative

Impact assessment The IA will try – if possible – to assess the impact on: VAT revenues Competitiveness Costs and administrative burdens (of the different stakeholders) Fundamental rights (data protection) It will be accompanied by a technical/feasibility study

Options structure The options are alternative (no cumulative) A 3 phased process Collection payment data Risk analysis Administrative cooperation (exchange/share data) Common definition of VAT relevant payment data Identification of the payee/supplier (name, address, tax number…) Payment transactions unique identifier Total amount of payment transaction Date of payment Country of origin of the payment Description of the supply underlining the payment transaction Common definition of payment intermediaries Definition from PSD2, exception payment initiation services ?

Option 1: baseline Collection payment data Possible only in 14 MSs out of 21 (depending on national legislation) Different intermediaries, payment data, format in different MSs Other tools for detection: internet tools, follow the goods (on import)… Risk analysis At national level Shared withing Eurofisc WF5 Data protection issues Administrative cooperation Only spontaneous between MSs (Article 13 Council Reg 904/2010) Limitations pursuant to the principle of proportionality (bulk requests no possible)

Option 2: non regulatory Investing in administrative capacity i.e. Fiscalis, SRSP Collection payment data Like option 1 Plus EU guideline and optional standard forms for the collection of data Risk analysis Plus EU guideline for the use of 3rd parties data Administrative cooperation

Option 3: regulatory 5 alternative sub-options Sub-option 3.1: automatic exchange of information Sub-option 3.2: automated access Sub-option 3.3: central storage and risk analysis Sub-option 3.4: sub-option 3.3 + single contact for payment intermediaries Sub-option 3.5: sub-option 3.3 + the payment intermediaries uploading data directly in the central electronic repository

Sub-option 3.1: automatic exchange of information Collection payment data Monthly or quarterly or yearly transmission of data form PSP to tax administration of establishment Inbound+outbound payments Threshold (per payee) to be decided Risk analysis At national level Inbound payments > domestic sellers / outbound payments > remote sellers Administrative cooperation Automatic exchange Data agglomerated per MS Quarterly transmission of data per MS (inbound+outbound) Covers only intra-EU payments

Sub-option 3.2: automated access Collection payment data Like 3.1 Risk analysis Administrative cooperation Data stored at national level Data made available to other MSs through VIES Covers only intra-EU payments

Sub-option 3.3: central storage and risk analysis Collection payment data Data collected from PSP on daily or weekly or monthly or quarterly or yearly basis Thresholds per payee to be considered Data uploaded in an EU central electronic repository To be developed later on during the implementation phase By the Commission / specifications to be decided with MSs Access only to Member States' Eurofisc WF5 officials Access to the Commission only for maintenance of the system Risk analysis Centralised Software to be developed by the Commission with the Member States Short retention of data (1 year) Administrative cooperation Only Eurofisc WF5 officials will have access to the data

Sub-option 3. 4: sub-option 3 Sub-option 3.4: sub-option 3.3 + single contact for payment intermediaries Collection payment data PSPs will choose one single tax authority to transmit all data for all the MSs Thresholds per payee to be considered Data uploaded in an EU central electronic repository To be developed later on during the implementation phase By the Commission / specifications to be decided with MSs Access only to Member States' Eurofisc WF5 officials Access to the Commission only for maintenance of the system Risk analysis Like 3.3 Administrative cooperation

Sub-option 3. 5: sub-option 3 Sub-option 3.5: sub-option 3.3 + the payment intermediaries uploading data directly in the central electronic repository Collection payment data PSPs established in the EU upload the data in a EU central repository (without passing through tax authorities) To be developed later on during the implementation phase By the Commission / specifications to be decided with MSs Access only to Member States' Eurofisc WF5 officials Access to the Commission only for maintenance of the system Thresholds per payee to be considered Risk analysis Like 3.3 Administrative cooperation