On 27th February 2018, the European Commission launched a consultation to increase the amount of data at the disposal of the Member States and of the enforcement bodies of the EU, enabling them to better tackle e-commerce VAT evasion and fraud.
The Commission underlined that “tax administrations have [few] sources of information to identify remote sellers (those situated in another EU country or in countries outside EU) that do not comply with the VAT rules when selling online to final consumers".
Crucial information is held by market intermediaries, such as payment service providers. This information could be used by tax administrations to detect the non-compliant remote sellers and assess their responsibility concerning VAT.
The consultation will gather stakeholders' opinions on:
The issue of VAT fraud in the context of e-commerce;
Whether the current EU rules on VAT provide the tax administrations with the appropriate instruments to combat VAT fraud in the field of e-commerce;
Whether an EU-harmonized approach could be more efficient;
The impact of the different options on fighting fraud, regulatory costs, and individuals rights.
Answers to a questionnaire on these four aspects are expected by 25 April 25 2018.
The work of the Commission in this area aims to enable Member States to communicate faster with fraudsters, as fraud can happen nearly instantaneously, and even more so online.
Pursuing that goal, the Commission is willing to establish a system of information sharing within Eurofisc, a network connecting anti-fraud experts. This system would enable member states to deal with the issue more efficiently.
Knowing that VAT fraud is estimated to cause losses for EU Member States of about EUR 50bn (USD 61bn) every year and that e-commerce is growing all around Europe, it is certainly an issue worth tackling.
Contact us for more information on the matter.