61 Tax and customs administration
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8189/05
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COM(05) 111
| Commission Communication: Community Programmes Customs 2013 and Fiscalis 2013
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| Legal base | — |
| Document originated | 6 April 2005
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| Deposited in Parliament | 17 May 2005
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| Department | Revenue and Customs
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| Basis of consideration | EM of 6 June 2005
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| Previous Committee Report | None
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| To be discussed in Council | None planned
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared
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Background
61.1 The EU's Customs programme (currently Customs 2007, for the
period 2003-2007) is intended to improve cooperation between Community
customs authorities so as to guarantee effective functioning of
the internal market in the matter of customs. The programme seeks
to achieve this in a number of ways, including creation and dissemination
of best practice, joint actions and providing the basis for new
communication and intelligence systems such as a Risk Information
Framework. Electronic customs has already achieved some successes
for example, the New Computerised Transit System not only facilitates
the application of correct customs controls but also reduces operator's
costs. The programme supports many activities, including sharing
of equipment between Member States, tackling counterfeiting and
piracy, developing common training tools and ensuring the security
of the external border of the Community's customs territory.
61.2 The Fiscalis programme (currently Fiscalis 2007, for the
period 2003-2007) is intended to improve cooperation between Community
tax authorities[206]
so as improve the operation of taxation systems in the internal
market. The programme seeks to do this by creating a greater understanding
of Community tax laws by Member States' officials, dissemination
of best practice and secure and efficient co-operation between
Member States and between them and the Commission. The programme
also funds the maintenance and development of communication and
exchange systems, including the VAT Information and Exchange System
(VIES) and the Common Communications Network (CCN/CSI).
61.3 The Commission says that together the programmes
are essential to the work of maintaining and developing the internal
market, of applying controls at the external border and of protecting
the Community's financial and other interests.
The document
61.4 The Commission has presented this Communication
in order to meet its commitment to submit by 6 April 2005 all
legislative proposals with budgetary implications for the period
of the next Financial Perspective (2007-2013). Although it is
not a formal proposal, with draft Decisions for renewal of the
Customs and Fiscalis programmes, it outlines what the Commission
expects to propose, subject to the outcome of interim evaluations
of the present programmes currently under way. It includes estimates
of expenditure for the programmes.
61.5 The Commission says that Customs 2013 will need
to address:
· common
implementation of Community customs law to avoid market distortions;
· ensuring
the security of the supply chain at the physical external frontier
and in third countries;
· providing
effective controls through the use of common risk management;
· ensuring
that controls are implemented effectively throughout the Community's
customs territory to avoid serious distortions in trade and threats
to its security;
· counterfeiting
and piracy; and
· modernising
and radically simplifying customs legislation, especially in the
light of increased e-government.
61.6 It says Fiscalis 2013 will need to address:
· elimination
of tax obstacles to all forms of cross-border economic activity;
· strengthening
of administrative co-operation and information exchange to resolve
tax issues and to fight fraud;
· support
for developments such as a VAT one -stop shop for businesses
trading in more than one Member State; and
· support
for reform and promotion of sound administrative practices in
near neighbours of the EU and other third countries.
61.7 The Commission says the main implementation
issues for the new programmes will be:
· upgrades
and development of trans-European computerised networks;
· joint
actions fostering mutual assistance, cooperation and efficient
use of resources;
· development
of common training tools; and
· cooperation
with and assistance to candidate countries, near neighbours and
other third countries.
61.8 The Commission proposes a budget of €324
million (£220 million) for Customs 2013 — as compared
with €157 million (£106 million) for Customs 2007. The
increase is mainly accounted for by the development of computerised
systems to support new business and legislative initiatives, including
€77 million (£52 million) for operation and development
of the current transit and tariff systems and €105 million
(£71 million) to deliver an e-customs project. The Fiscalis
2013 budget would be for €175 million (£119 million)
— as compared with €67 million (£45 million) for
Fiscalis 2007. The increase is mainly for development costs for
IT systems such as VIES, improvements needed to the CCN/CSI mail
system to handle increasing traffic flows and incorporation of
the Excise Movement Control System (for movement of excisable
products between tax warehouses in the Community under duty suspension
arrangements) into the Fiscalis 2013 programme.
61.9 Although the Communication and the Customs and
Fiscalis programmes are concerned mainly with indirect taxation
—VAT and excise — and customs, the document has the
following paragraph about direction taxation, which is a matter
for Member States:
"Direct taxes also have an impact on the
functioning of the common market. Taxation policies must therefore
clearly take into account important Union objectives, such as
further deepening and supporting the functioning of the single
market and promoting growth and employment while at the same time
protecting tax bases against harmful tax competition and tax fraud
as well as making life easier for legitimate business."
The Government's view
61.10 The Paymaster General (Dawn Primarolo) says
that the Government is generally supportive of the Customs and
Fiscalis programmes, recognises that enhanced cooperation and
information exchange is useful in countering fraud and has made
use of the programmes. But she says that when formal proposals
emerge the Government will, as a matter of principle, challenge
the Commission to justify fully the proposed significant increases
in expenditure, whilst supporting funding for simplification such
as VIES II, which will facilitate a one-stop shop for VAT taxpayers,
and for the e-customs project, which will underpin the new Customs
Code.
61.11 The Minister notes the reference to direct
taxation in the document, drawing our attention to the potential
subsidiarity issue, and reminds us that the Government opposed
extension of the Fiscalis 2007 programme to include direct taxes
and secured an opt-out arrangement in respect of such taxation.
The Minister also notes the document's brief reference to threats
to the Community's security, a Third Pillar[207]
matter, and says the Government will need to ensure that the co-financing
aspects of the formal proposals respect the division between Commission
and Member State competence.
Conclusion
61.12 Whilst accepting the Government's view of
the utility of the Customs and Fiscalis programmes, we support
its intention to test the case for increased expenditure, to resist
creep into the area of Member State competence on direct taxation
matters and to ensure respect for the line between First and Third
Pillar issues.
61.13 We shall expect to hear
of these matters being tackled vigorously when formal proposals
for renewal of the programmes are tabled. Meanwhile we clear this
document.
206 The UK's participation is limited to indirect taxation
matters. Back
207
The inter-governmental Third Pillar is police and judicial cooperation
in criminal matters. Back
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