4 Value added taxation
| (30885)
12886/09
COM(09) 427
| Draft Council Regulation on administrative cooperation and combating fraud in the field of value added tax (Recast)
|
| Legal base | Article 93 EC; consultation; unanimity
|
| Department | HM Treasury
|
| Basis of consideration |
Minister's letter of 14 December 2009
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| Previous Committee Report
| HC 19-xxvii (2008-09), chapter 9 (14 October 2009)
|
| To be discussed in Council
| Not known |
| Committee's assessment |
Politically important |
| Committee's decision |
Not cleared; further information awaited
|
Background
4.1 The main instrument governing the exchange of information
and assistance in VAT matters is the Administrative Cooperation
Regulation (Council Regulation (EC) No 1798/2003). This has been
amended on a number of occasions, most recently in late 2008.
The Regulation is therefore in need of consolidation.
4.2 This draft Regulation is to recast (consolidate
and amend) the existing Administrative Cooperation Regulation.
The proposal sets out the Commission's aim of providing Member
States with the means for efficient and well organised administrative
cooperation procedures on VAT issues to combat cross-border VAT
fraud more effectively and for better collection of VAT in cases
where the place of taxation is different from the place of establishment
of the supplier.
4.3 The draft Regulation would recast the present
Regulation to take into account changes that have already been
agreed in other instruments, align, reorder and harmonise existing
legal text, introduce new measures and extend the role of the
existing comitology[6]
committee (the Standing Committee on Administrative Cooperation)
to some of the new elements. The key measures include:
- common minimum standards for
Member States when registering and deregistering traders for VAT;
- giving authorised personnel in other Member States
automatic access to certain data on VAT registered businesses
held by a Member State;
- allowing authorised tax authority personnel access
to another Member State's summary intra-Community trading information
and certain other data;
- Eurofisc — the main function of which will
be to provide a fast-track network for exchanging specified data
between Member States and to provide an early warning system of
possible fraud; and
- an enhanced VAT number verification system to
help businesses verify their Community customer's details.
Other changes include:
- establishing the principle
that Member States are collectively responsible for helping each
other to secure their VAT revenues;
- a requirement that tax authorities provide each
other with feedback on the value of the information which they
exchange;
- clarification of existing legislation to facilitate
greater use of cooperation tools and to remove inconsistencies
of interpretation.
4.4 When we considered the proposal, in October 2009,
we heard that fighting VAT fraud remained a priority for the Government
and that it therefore welcomed the Commission's proposal, supported
many of the measures in it but had some reservations, which it
would need to address during negotiations. We commented that cooperation
between Member States to counter VAT fraud was clearly important,
and rationalising and improving legislation facilitating that
cooperation would be welcome. However, we noted the Government's
reservations about the detail of the draft Regulation. So before
considering that document further we asked to hear about developments
on these points in the negotiations and to see, if the need for
one emerged, any Impact Assessment.[7]
The Minister's letter
4.5 The Financial Secretary to the Treasury (Mr Stephen
Timms) writes now to tell us that:
- only two working group meetings
on this matter have been held under the Swedish Presidency and
so there has been only limited discussion of the proposal;
- so the Government has had little opportunity
to explore the proposal with other Member States and test its
interpretations of the original text;
- nevertheless it is aware from those discussions
that there is a wide spectrum of views on the proposal;
- more specifically other Member States share its
concerns with regard to common minimum standards and about the
role played by comitology more widely; and
- the Government anticipates that the Spanish Presidency
will see this matter as a priority and that more substantive discussions
will take place early in 2010.
Conclusion
4.6 We are grateful to the Minister for keeping
us informed in relation to this draft Regulation. We look forward
to hearing in due course about more substantive discussion. Meanwhile
the document remains under scrutiny.
6 Comitology is the system of committees which oversees
the exercise by the Commission of powers delegated to it by the
Council and the European Parliament. Comitology committees are
made up of representatives of the Member States and chaired by
the Commission. There are three types of procedure (advisory,
management and regulatory), an important difference between
which is the degree of involvement and power of Member States'
representatives. So-called "Regulatory with Scrutiny",
introduced in July 2006, gives a scrutiny role to the European
Parliament in most applications of comitology. Back
7
See headnote. Back
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