The EU’s new VAT system has introduced rules which will make relevant data on online purchases available to anti-fraud authorities.
With the new rules, anti-fraud experts in EU Member States will have access to VAT-relevant data held by payment intermediaries such as credit card and debit card providers. Payment service providers will now be required to give member state authorities certain payment data from cross-border sales which can then be accessed and analysed by anti-fraud specialists.
Both EU and non-EU online sellers will also be identifiable when they do not comply with VAT obligations.
The Commission stated that similar provisions in certain member states and other countries have shown the positive impact cooperation can have in beating fraud.
If these rules are accepted by the European Parliament, they will be put into force in January 2024.
Commissioner for economic and financial affairs, taxation and customs Pierre Moscovici said, “With a stream of proposals over the last five years, this Commission has been quietly building up a formidable track record in helping to simplify the EU’s VAT system, reducing opportunities for fraud and making life easier for legitimate businesses.
“It’s clear that Member States are of the same mind when it comes to these aims, and I hope that this momentum can translate into large-scale reform of the entire legislation underpinning the system.”
EU finance ministers also agreed on updating an existing VAT rule for EU SMEs which will give more opportunity for cross-border activities. The regime change aims to remove red tape and administrative burdens for small companies and establish a level playing field for businesses across Europe.
Its new rules will ensure a uniform domestic turnover threshold of €85,000 for companies doing business in their own member state and an EU-wide €100,000 threshold in turnover for SMEs doing cross-border business. These changes are expected to enter into force in January 2025.
Copyright © 2019 FinTech Global