Procedure : 2009/0118(CNS)
Document stages in plenary
Document selected : A7-0061/2010

Texts tabled :

A7-0061/2010

Debates :

Votes :

PV 05/05/2010 - 13.1
Explanations of votes

Texts adopted :

P7_TA(2010)0091

REPORT     *
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25.3.2010
PE 430.982v02-00 A7-0061/2010

on the proposal for a Council regulation on administrative cooperation and combating fraud in the field of value added tax (Recast)

(COM(2009)0427 – C7-0165/2009 – 2009/0118(CNS))

Committee on Economic and Monetary Affairs

Rapporteur: José Manuel García-Margallo y Marfil

(Recast - Rule 87 of the Rules of Procedure)

AMENDMENTS
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 ANNEX: LETTER FROM THE COMMITTEE ON LEGAL AFFAIRS
 ANNEX: OPINION OF THE CONSULTATIVE WORKING PARTY OF THE LEGAL SERVICES OF THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COMMISSION
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a Council regulation on administrative cooperation and combating fraud in the field of value added tax (Recast)

(COM(2009)0427 – C7-0165/2009 – 2009/0118(CNS))

(Special legislative procedure – consultation – recast)

The European Parliament,

–    having regard to the Commission proposal to the Council (COM(2009)0427),

–    having regard to Article 93 of the EC Treaty, pursuant to which the Council consulted Parliament (C7-0165/2009),

–    having regard to the communication from the Commission to the European Parliament and the Council entitled 'Consequences of the entry into force of the Treaty of Lisbon for ongoing interinstitutional decision-making procedures' (COM(2009)0665),

–    having regard to Article 113 of the Treaty on the Functioning of the European Union,

–   having regard to the Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts(1),

–    having regard to the letter of 12 November 2009 from the Committee on Legal Affairs to the Committee on Economic and Monetary Affairs in accordance with Rule 87(3) of its Rules of Procedure,

–    having regard to Rules 87 and 55 of its Rules of Procedure,

–    having regard to the report of the Committee on Economic and Monetary Affairs (A7‑0061/2010),

A.  whereas, according to the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission, the proposal in question does not include any substantive amendments other than those identified as such in the proposal and whereas, as regards the codification of the unchanged provisions of the earlier acts together with those amendments, the proposal contains a straightforward codification of the existing texts, without any change in their substance,

1.  Approves the Commission proposal as adapted to the recommendations of the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission (and incorporating the technical amendments approved by the Committee on Legal Affairs) and as amended below;

2.   Calls on the Commission to alter its proposal accordingly, pursuant to Article 293(2) of the Treaty on the Functioning of the European Union;

3.   Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

4.   Asks the Council to consult Parliament again if it intends to amend the Commission proposal substantially;

5.   Instructs its President to forward its position to the Council, to the Commission and to the national parliaments.

Amendment  1

Proposal for a regulation

Recital 2

Text proposed by the Commission

Amendment

(2) Tax evasion and tax avoidance extending across the frontiers of Member States lead to budget losses and violations of the principle of fair taxation and are liable to bring about distortions of capital movements and of the conditions of competition. They therefore affect the operation of the internal market.

(2) Tax evasion and tax avoidance extending across the frontiers of Member States lead to budget losses and violations of the principle of fair taxation and are liable to bring about distortions of capital movements and of the conditions of competition. They therefore negatively affect the operation of the internal market.

Justification

In emphasis of the negative impact of tax evasion and tax avoidance on the internal market.

Amendment  2

Proposal for a regulation

Recital 3 a (new)

Text proposed by the Commission

Amendment

 

(3a) The European Parliament, in its resolution of 2 September 2008 on a coordinated strategy to improve the fight against fiscal fraud1, reiterated that the existing system for managing VAT needs a radical overhaul, and urged the Commission, therefore, to submit proposals for harmonising the registration and de-registration procedures for taxable persons and for allowing Member States automatic access to non-sensitive data on their taxpayers which is held by another Member State.

 

___________________________

1 OJ C 295 E, 4.12.2009, p. 13.

Justification

Parliament called for closer administrative cooperation in its 2008 report on tax fraud.

Amendment  3

Proposal for a regulation

Recital 3 b (new)

Text proposed by the Commission

Amendment

(3b) In obtaining such automatic access to non-sensitive data, an appropriate level of protection, limited storage period of the data exchanged and due accountability of the data keeper institution or body, in order to prevent the mismanagement or leakage of the data, should be ensured.

Justification

Due protection of data related to taxpayers, the limited storage period of those data, and the accountability of the data keeper institution or body are key elements to prevent from data mismanagement and/or leakage.

Amendment  4

Proposal for a regulation

Recital 5 a (new)

Text proposed by the Commission

Amendment

 

(5a) The European Parliament, in its resolution of 4 December 2008 on the European Court of Auditors' Special Report No 8/2007 concerning administrative cooperation in the field of value added tax1, expressed its conviction that the introduction of Eurofisc can provide added value only if participation therein is compulsory for all Member States in order to avoid the problems encountered by Eurocanet and if the Commission fully participates in the activities of Eurofisc and plays a coordinating role;

 

__________

1 OJ C 21 E, 28.1.2010, p.3.

Justification

Parliament already called for the introduction of Eurofisc in 2008.

Amendment  5

Proposal for a regulation

Recital 5 b (new)

Text proposed by the Commission

Amendment

(5b) The European Parliament, in its resolution of 4 December 2008, also called for the introduction of Eurofisc and recalled the paramount necessity for sharing existing national best practices in the fight against cross-border VAT fraud with a view to introducing both appropriate incentives for due diligence by Member States in relation to VAT, and rewards for honest taxpayers.

Justification

The mere creation of Eurofisc will not solve the problem of cross-border VAT fraud, whereas the introduction of appropriate incentives for VAT due diligence by EU Member States and rewards for honest taxpayers could contribute substantially to the reduction of this criminal activity.

Amendment  6

Proposal for a regulation

Recital 14

Text proposed by the Commission

Amendment

(14) In view of the repetitive nature of certain requests and the linguistic diversity within the Community, it is important to spread the use of standard forms in the exchange of information so that information requests can be processed more quickly.

(14) In view of the repetitive nature of certain requests and the linguistic diversity within the Community, it is important to spread and promote the use of standard forms in the exchange of information so that information requests can be processed more quickly.

Justification

To ensure a timely adoption of new standardised forms by all member states.

Amendment  7

Proposal for a regulation

Recital 20

Text proposed by the Commission

Amendment

(20) The conditions for the exchange of, and automated access of Member States to electronically stored data in each Member State should be clearly defined.

(20) The conditions for the exchange of, and automated access of Member States to electronically stored data in each Member State and the means of storage of such data should be clearly defined.

Justification

To ensure that the storage of personal data will be set at a minimum standard of security across all Member States.

Amendment  8

Proposal for a regulation

Recital 29

Text proposed by the Commission

Amendment

(29) Recent practical experience of the application of Regulation (EC) No 1798/2003 in the fight against carrousel fraud has shown that in some cases it is essential to establish a much faster mechanism for the exchange of information, covering much more, and more targeted, information in order to combat fraud effectively. This mechanism should be included within the framework of the Regulation while keeping sufficient flexibility to adapt to new types of fraud. Eurocanet (European Carrousel Network), established on the initiative of Belgium and supported by the Commission, is an example of this kind of cooperation.

(29) Recent practical experience of the application of Regulation (EC) No 1798/2003 in the fight against carrousel fraud has shown that in some cases it is essential to establish a much faster mechanism for the exchange of information, covering much more, and more targeted, information in order to combat fraud effectively. This mechanism should be included within the framework of the Regulation while keeping sufficient flexibility to adapt to new types of fraud. Eurocanet (European Carrousel Network), established on the initiative of Belgium and supported by the Commission, is an example of this kind of cooperation. With a view to ensuring the proper functioning of this mechanism, a Union approach should be adopted.

Justification

This amendment makes it clear that Eurofisc will operate on the basis of an EU-level approach.

Amendment  9

Proposal for a regulation

Recital 35

Text proposed by the Commission

Amendment

(35) For the purposes of this Regulation, it is appropriate to consider limitations of certain rights and obligations laid down by Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data in order to safeguard the interests referred to in Article 13(1)(e) of that Directive. Such limitations are necessary and proportionate in view of the potential loss of revenue for Member States and the crucial importance of this information to effectively combating fraud.

(35) For the purposes of this Regulation, it is appropriate to consider limitations of certain rights and obligations laid down by Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data in order to safeguard the interests referred to in Article 13(1)(e) of that Directive, as well as those laid down by Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data2.

 

___________

1 OJ L 8, 12.1.2001, p.1.

Justification

See the opinion of the European Data Protection Supervisor of 30 October 2009.

Amendment  10

Proposal for a regulation

Recital 36 a (new)

Text proposed by the Commission

Amendment

 

(36a) The European Data Protection Supervisor has been consulted,

Justification

Given that the new regulation is liable to involve the processing of personal data and the fact that the European Data Protection Supervisor has submitted an opinion, it is desirable to cite that opinion in the preamble to the legislative act.

Amendment  11

Proposal for a regulation

Article 1 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

To that end, it lays down rules and procedures to enable the competent authorities of the Member States to cooperate and to exchange with each other any information that may help to effect a correct assessment of VAT, monitor the correct application of VAT, particularly on intra-Community transactions, and combat VAT fraud. In particular, it lays down rules and procedures for Member States to collect and exchange such information by electronic means.

To that end, it lays down rules and procedures to enable the competent authorities of the Member States to cooperate and to exchange with each other any information that is necessary in order to effect a correct assessment of VAT, monitor the correct application of VAT, particularly on intra-Community transactions, and combat VAT fraud. In particular, it lays down rules and procedures for Member States to collect and exchange such information by electronic means.

Justification

The processing of personal data is only acceptable if it is necessary for achieving the objectives of the measure: see the opinion of the European Data Protection Supervisor of 30 October 2009.

Amendment  12

Proposal for a regulation

Article 1 a (new)

Text proposed by the Commission

Amendment

 

Article 1a

 

Within the framework of application of this Regulation, the Member States and the Commission shall ensure respect for the rights and obligations laid down in Directive 95/46/EC and Regulation (EC) No 45/2001;

Justification

See the opinion of the European Data Protection Supervisor of 30 October 2009.

Amendment  13

Proposal for a regulation

Article 15

Text proposed by the Commission

Amendment

The competent authorities of the Member States shall spontaneously forward to the competent authorities of the other Member States any information referred to in Article 1 of which they are aware and which may be useful to the competent authorities of the other Member States.

 

The competent authorities of the Member States shall spontaneously forward to the competent authorities of the other Member States any information referred to in Article 1 of which they are aware and which is necessary in order to assess VAT accurately, ensure the proper application of VAT legislation, in particular as regards intra-Union transactions, and fight VAT-related fraud.

Justification

The processing of personal data is only acceptable if it is necessary for achieving the objectives of the measure. See the opinion of the European Data Protection Supervisor of 30 October 2009.

Amendment  14

Proposal for a regulation

Article 18 – paragraph 1 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

The persons referred to in point (b) shall be invited to give their opinion on the quality of the information held.

Justification

A more explicit procedure for the reporting on the quality of information exchanged in feedback is required.

Amendment  15

Proposal for a regulation

Article 18 – paragraph 3

Text proposed by the Commission

Amendment

3. The list and details of the data referred to in paragraph 1(b), (c) and (d) and paragraph 2 of this Article shall be adopted in accordance with the procedure referred to in Article 60(2).

3. The list and details of the data referred to in paragraph 1(b), (c), (d) and (e) and paragraph 2 of this Article shall be adopted in accordance with the procedure referred to in Article 60(2), without imposing a disproportionate administrative burden on the requested authority.

Justification

The aim here is to improve quality of feedback provided by an authority, rather than increasing the administrative burden.

Amendment  16

Proposal for a regulation

Article 22 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

Every Member State shall grant the competent authorities of any other Member State automated access to the information contained in the databases referred to in Article 18. In the case of the information referred to in Article 18(1)(a), at least the following details shall be accessible: 

With the sole aim of ensuring that there is no breach of the VAT legislation and where it is deemed necessary in order to monitor intra-Union purchases of goods or provisions of services which are subject to taxation in the Member State concerned, every Member State shall grant the competent authorities of any other Member State automated access to the information contained in the databases referred to in Article 18. In the case of the information referred to in Article 18(1)(a), at least the following details shall be accessible: 

Justification

The processing of personal data is only acceptable where its purpose is clearly specified. In addition, it is desirable to limit the risks associated with automatic access to databases which could include personal data.

Amendment  17

Proposal for a regulation

Article 22 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Where the databases referred to in Article 18(1)(a) include personal data, automatic access thereto shall be limited to the categories of data mentioned in this Article.

Justification

The processing of personal data is only acceptable where its purpose is clearly specified. In addition, it is desirable to limit the risks associated with automatic access to databases which could include personal data.

Amendment  18

Proposal for a regulation

Article 34 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

1. A common structure for combating VAT evasion and avoidance shall be established under this Regulation. It shall perform the following tasks:

1. A structure for combating VAT evasion and avoidance shall be established at Union level under this Regulation. It shall perform the following tasks:

Justification

This amendment makes it clear that Eurofisc will operate on the basis of an EU-level approach.

Amendment  19

Proposal for a regulation

Article 34 – paragraph 2

Text proposed by the Commission

Amendment

2. The competent authorities of the Member States shall determine the fields of investigation to be covered by the structure referred to in paragraph 1.

2. The Union-level structure referred to in paragraph 1 shall be made up of officials appointed by the competent authorities of the Member States.

Justification

The aim here is to clarify the fact that Eurofisc will operate on the basis of an EU-wide approach.

Amendment  20

Proposal for a regulation

Article 34 – paragraph 3

Text proposed by the Commission

Amendment

3. For each field of investigation the competent authorities of the Member States shall designate one or more Member States within the structure to supervise and guide performance of the tasks referred to in paragraph 1.

3. The Union-level structure referred to in paragraph 1 shall determine the fields of investigation in which it will carry out its tasks.

Justification

The aim here is to clarify the fact that Eurofisc will operate on the basis of an EU-wide approach.

Amendment  21

Proposal for a regulation

Article 34 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

3a. In order to investigate VAT fraud with more efficiency in the Union, an incentive mechanism shall be designed for the recovery of cross-border tax claims by distributing a fair proportion of the collected unpaid VAT between the Member State recovering the tax claims and the requesting Member State.

Justification

The efficiency of the EU VAT recovery system should be streamlined in order to get the size of VAT frauds reduced across the EU. Bearing in mind, that major part of the VAT losses are brought about by carousel frauds, the community should put more efforts to get tax administrations cooperated with greater efficiency. Therefore, an incentive mechanism should be put in place to achieve this goal.

Amendment  22

Proposal for a regulation

Article 35

Text proposed by the Commission

Amendment

The structure established under Article 34 shall be made up of competent officials designated by the competent authorities of the Member States. It shall be provided with technical, administrative and operational support by the Commission.

 

The Commission shall coordinate, guide and supervise the performance of the tasks referred to in Article 34(1), and shall provide technical, administrative and operational support to the competent authorities of the Member States.

Justification

The aim here is to clarify the fact that Eurofisc will operate on the basis of an EU-wide approach and to specify the Commission's role in its operations.

Amendment  23

Proposal for a regulation

Article 39

Text proposed by the Commission

Amendment

The structure established under Article 34 shall submit an annual account of its activities to the Committee referred to in Article 60.

The structure established under Article 34 shall submit an annual account of its activities to the Member States, the European Parliament and the Committee referred to in Article 60.

Justification

It is important that Eurofisc should have an open and transparent structure and it should therefore be made clear that not only the administrative committee set up by the Commission is to have the right to examine its reports but also the Member States and the European Parliament.

Amendment  24

Proposal for a regulation

Article 51 – paragraph 1

Text proposed by the Commission

Amendment

1. The Member States and the Commission shall examine and evaluate how the arrangements for administrative cooperation provided for in this Regulation are working. In particular, the Member States shall conduct audits of the operation of those arrangements. The Commission shall pool the Member States' experience with the aim of improving the operation of those arrangements.

1. The Member States, the European Parliament and the Commission shall examine and evaluate how the arrangements for administrative cooperation provided for in this Regulation are working. In particular, the Member States shall conduct audits of the operation of those arrangements. The Commission shall pool the Member States' experience with the aim of improving the operation of those arrangements and shall regularly report to the Member States and the European Parliament on the results.

Amendment  25

Proposal for a regulation

Article 51 – paragraph 2

Text proposed by the Commission

Amendment

2. The Member States shall communicate to the Commission any available information relevant to their application of this Regulation.

2. The Member States shall communicate to the European Parliament and the Commission any available information relevant to their application of this Regulation.

Amendment  26

Proposal for a regulation

Article 51 – paragraph 9

Text proposed by the Commission

Amendment

9. The Commission may provide expert opinions, technical or logistical assistance, information campaigns or any other operational support for the Member States with a view to attaining the objectives of this Regulation.

9. The Commission shall provide expert opinions, technical or logistical assistance, information campaigns or any other operational support for the Member States with a view to attaining the objectives of this Regulation.

Justification

In order to establish effective cooperation, it is important that the Commission should be responsible for providing assistance and expert opinions to help the Member States to attain the objectives.

Amendment  27

Proposal for a regulation

Article 52 – paragraph 2

Text proposed by the Commission

Amendment

2. Provided the third country concerned has given an undertaking to provide the assistance required to gather evidence of the irregular nature of transactions which appear to contravene VAT legislation, information obtained under this Regulation may be communicated to that third country, with the consent of the competent authorities which supplied the information, in accordance with their domestic provisions applying to the communication of personal data to third countries.

2. Provided the third country concerned has given an undertaking to provide the assistance required to gather evidence of the irregular nature of transactions which appear to contravene VAT legislation, information obtained under this Regulation may be communicated to that third country, with the consent of the competent authorities which supplied the information, in accordance with their domestic provisions applying to the communication of personal data to third countries and subject to the implementing provisions of Directive 95/46/EC and Regulation (EC ) No 45/2001.

Justification

The guarantees contained in the EU legislation on data protection also apply to relations with third countries.

Amendment  28

Proposal for a regulation

Article 57 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

1. Information communicated or collected  in any form pursuant to this Regulation, including any information to which an official has had access in the circumstances set out in Chapters VII, VIII and X, and in the cases referred to in paragraph 2 of this Article, shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under both the national law of the Member State which received it and the corresponding provisions applicable to Community authorities. They shall be used only in the circumstances provided for in this Regulation. 

1. Information communicated or collected  in any form pursuant to this Regulation, including any information to which an official has had access in the circumstances set out in Chapters VII, VIII and X, and in the cases referred to in paragraph 2 of this Article, shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under both the national law of the Member State which received it and the corresponding provisions applicable to Community authorities. Such information is also protected by Directive 95/46/EC and by Regulation (EC) No 45/2001. It shall be used only in the circumstances provided for in this Regulation 

Justification

It is desirable to introduce an explicit reference to the guarantees set out in the EU legislation on data protection.

Amendment  29

Proposal for a regulation

Article 57 – paragraph 5

Text proposed by the Commission

Amendment

5. All storage or exchange of information referred to in this Regulation is subject to the provisions implementing Directive 95/46/EC. However, Member States shall, for the purpose of the correct application of this Regulation, restrict the scope of the obligations and rights provided for in Article 10, Article 11(1), Articles 12 and 21 of Directive 95/46/EC to the extent required in order to safeguard the interests referred to in Article 13(e) of that Directive.

5. All storage or exchange of information referred to in this Regulation is subject to the provisions implementing Directive 95/46/EC and Regulation (EC) No 45/2001. However, Member States may, for the purpose of the correct application of this Regulation, adopt legislative measures restricting the scope of the obligations and rights provided for in Article 10, Article 11(1), Articles 12 and 21 of Directive 95/46/EC to the extent required in order to safeguard the interests referred to in Article 13(e) of that Directive.

Justification

It is desirable to introduce an explicit reference to the guarantees set out in the EU legislation on data protection, as well as to the need for any restrictions to be established by legislative means.

Amendment  30

Proposal for a regulation

Article 57 – paragraph 5 a (new)

Text proposed by the Commission

Amendment

 

5a. The Member States and the Commission shall ensure respect for the obligations relating to transparency and information with regard to the interested parties in cases involving retrieval of the personal data referred to in Directive 95/46/EC and Regulation (EC) No 45/2001.

Justification

An explicit reference should be introduced to the transparency obligation regarding the interested parties.

Amendment  31

Proposal for a regulation

Article 59 – paragraph 1 – point c a (new)

Text proposed by the Commission

Amendment

(ca) ensure the highest standard of quality of the data exchanged, with the highest degree of transparency, where appropriate.

Justification

It is desirable for Member States to exchange and receive data reports of the highest possible quality, and these should meet with standards for transparency.

Amendment  32

Proposal for a regulation

Article 59 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Member States shall inform the Commission each year of any cases in which another Member State has refused to provide the requesting Member State with information or has prevented the requesting Member State from carrying out an administrative inquiry where a request was introduced in due form. The requested Member State shall inform the Commission of the grounds on which it refused to give the information or facilitate the inquiry. The Commission shall examine the information provided and shall make appropriate recommendations. Those recommendations shall be forwarded to the European Parliament and the Council.

Justification

With a view to improving the exchange of information between the various national authorities, it is proposed to monitor cases where a Member State has refused to transmit information or has failed to authorise an administrative inquiry.

Amendment  33

Proposal for a regulation

Article 60 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Where the measures adopted under the procedure referred to in paragraph 2 refer to or imply the processing of personal data, the European Data Protection Supervisor shall be consulted.

Justification

Where the implementing provisions of this regulation are liable to affect the processing of personal data, it will be desirable to obtain the opinion of the European Data Protection Supervisor.

(1)

OJ C 77, 28.3.2002, p. 1.


EXPLANATORY STATEMENT

INTRODUCTION

The legislative proposal under consideration is the recast of Council Regulation (EC) No 1798/2003 on administrative cooperation and combating fraud in the field of value added tax. Through its proposal, the Commission aims to give Member States the means to combat cross-border VAT fraud more effectively. In addition, the proposal supplements and amends various aspects of the current regulation, the most significant of which is the creation of a legal basis for establishing a structure for targeted cooperation to combat fraud – Eurofisc.

BACKGROUND: THE EUROPEAN COMMISSION’S LAST REPORT

Before examining the Commission’s proposal in detail, I would like to take a brief look at the more general context of combating tax fraud in the European Union.

Tax fraud has serious consequences for national budgets, leads to violations of the principle of fair taxation and is liable to bring about distortions of competition, thereby affecting the operation of the internal market. Distortions caused by VAT fraud affect the overall balance of the resource system, which must be fair and transparent in order to guarantee the smooth operation of the Union. Since the public authorities have an obligation to compensate for the loss of revenue involved, an increase in fraud translates into greater fiscal pressure on companies which abide by tax rules. Although investigations into the magnitude of VAT evasion and fraud have not been carried out in all Member States, several estimates have been published. The International VAT Association quotes estimates of VAT losses ranging from EUR 60 billion to EUR 100 billion per year across the European Union.

As the members of this committee are aware, since these issues were dealt with in the previous parliamentary term in the context of the draft report by Sharon Bowles on a coordinated strategy to improve the fight against fiscal fraud, the fight against fraud, although to a large extent the responsibility of the Member States, cannot be undertaken at national level alone. Combating tax fraud must be a priority for the EU and must entail closer cooperation between Member States’ administrative authorities and with the Commission. In this connection, the Commission, following guidelines marked out by the Council since 2007, has been drawing up a set of legislative measures aimed at improving the management of VAT, but without having to make fundamental changes to the system in force.

In addition, reference should be made to the Court of Auditors’ Special Report No 8/2007, which is highly critical of the Member States. In its report, the Court of Auditors called upon the Member States to give higher priority to administrative cooperation, in respect of both the operational information exchanges and their administrative management, and for them to encourage more direct communication between local inspection staff as an effective way to speed up the exchange of information. It also formulated, among other points, a series of improvements relating to the VAT database (VIES).

Meanwhile, earlier this year the Commission published a report on the application of Council Regulation (EC) No 1798/2003, which is the regulation under consideration today. The report’s main conclusions may be summarised as follows:

§ the number of late replies to requests for cooperation has reached an unacceptable level;

§ the Commission considers that automated access to databases of other Member States would speed up administrative cooperation;

§ most Member States have no feedback system;

§ the problems of non-validity of VAT numbers and delays in correcting the data still persist;

§ there are still practical problems regarding the presence of officials from one State in another State, such as language problems or the lack of a national legal basis permitting such a presence.

MAIN ELEMENTS OF THE PROPOSAL

Below is a brief review of the main innovations brought in by this proposal.

Firstly, Member States' responsibility in the field of administrative cooperation is extended to protect the VAT revenue of all Member States. The proposed regulation expressly states that the regulation’s aim is not only to allow VAT to be calculated correctly, but also to monitor its correct application, particularly with regard to intra-Community transactions, and combat VAT fraud.

Secondly, the proposal defines precisely the information that Member States must collect and make available to other Member States through an electronic database system. It also defines common rules on the information to be collected and the checks to be carried out when a VAT identification number is registered in the database. Uniform rules are also laid down for storage of the data thus obtained for a period of five years.

In general terms, several improvements are introduced relating to the exchange of information, namely: an improved definition of the cases in which Member States may carry out an administrative investigation, including measures to remedy the failure to carry out an investigation; an improved definition of the conditions for the automatic exchange of information, including the use of standard forms and files as well as the introduction of spontaneous exchange and the obligation to supply feedback, i.e. information on the use made of the information forwarded by another Member State.

The Commission is also proposing the creation of a legal basis for establishing a structure (Eurofisc) for targeted cooperation to combat fraud. According to the Commission, this structure will make possible multilateral, swift and targeted exchange of information so that Member States can respond adequately and in a coordinated fashion to combat any new kinds of fraud that emerge. It will be able to draw on jointly organised risk analysis. In reality, what the Commission is proposing is formalising the Eurocanet network (European Carousel Network), set up a few years ago at the initiative of Belgium, supported by the Commission, in order for it to cover all types of cross-border fraud. In the opinion of experts in the fight against fraud, Eurocanet’s work has produced positive results.

Finally, it should be pointed out that the Regulation also defines access rights to information in terms of persons and situations. On 30 October 2009, the European Data Protection Supervisor drew up an opinion setting out his views on the proposal, in which he points out certain aspects that could be improved to guarantee compliance with European data protection rules.

RAPPORTEUR’S REMARKS

The submission of this legislative proposal is good news for the fight against fiscal fraud. Overall, the rapporteur takes a positive view and supports the Commission’s proposal.

The rapporteur has identified three areas in which the Commission’s proposal should be strengthened:

§ In relation to Eurofisc, it is proposed that the Community nature of the new structure should be clarified, as well as the role that the European Commission should play within this context.

§ With the aim of improving the exchange of information between different national authorities and remedying the shortcomings identified by the Commission in its recent report, it is proposed that the European Commission should institute systematic monitoring of cases in which Member States have refused to communicate information or carry out an investigation.

§ Finally, in response to legitimate concerns expressed by members of the Committee on Economic and Monetary Affairs at the first exchange of views, the rapporteur proposes that the recommendations made by the European Data Protection Supervisor be incorporated in the text, since the exchange of information between fiscal administrative authorities, although mainly involving data concerning legal persons, may also involve the handling of data belonging to natural persons. As the European Data Protection Supervisor emphasises, the processing of such data must be in conformity with the Community rules on data protection.


ANNEX: LETTER FROM THE COMMITTEE ON LEGAL AFFAIRS

COMMITTEE ON LEGAL AFFAIRS

CHAIRMAN

Ref.: D(2009)61475

Ms Sharon BOWLES

Chair of the Economic and Monetary Affairs Committee

ASP 10G201

Brussels

Subject:     Proposal for a regulation of the Council on administrative cooperation and combating fraud in the field of value added tax (recast)

                  (COM(2009)427 – C7‑0165/2009 – 2009/0118(CNS))

Dear Chair,

The Committee on Legal Affairs, which I am honoured to chair, has examined the proposal referred to above, pursuant to Rule 87 on Recasting, as introduced into the Parliament's Rules of Procedure.

Paragraph 3 of that Rule reads as follows:

"If the committee responsible for legal affairs considers that the proposal does not entail any substantive changes other than those identified as such in the proposal, it shall inform the committee responsible.

In such a case, over and above the conditions laid down in Rules 156 and 157, amendments shall be admissible within the committee responsible only if they concern those parts of the proposal which contain changes.

However, if in accordance with point 8 of the Interinstitutional Agreement the committee responsible intends also to submit amendments to the codified parts of the Commission proposal, it shall immediately notify its intention to the Council and to the Commission, and the latter should inform the committee, prior to the vote pursuant to Rule 54, of its position on the amendments and whether or not it intends to withdraw the recast proposal."

Following the opinion of the Legal Service, whose representatives participated in the meetings of the Consultative Working Party examining the recast proposal, and in keeping with the recommendations of the draftsperson, the Committee on Legal Affairs considers that the proposal in question does not include any substantive changes other than those identified as such in the proposal or in the opinion of the Consultative Working Party and that, as regards the codification of the unchanged provisions of the earlier acts with those changes, the proposal contains a straightforward codification of the existing texts, without any change in their substance.

Furthermore, pursuant to Rules 87, the Committee on Legal Affairs considered that the technical adaptations suggested in the opinion of the abovementioned Working Party were necessary in order to ensure that the proposal complied with the recasting rules.

In conclusion, after discussing it at its meeting of 11 November 2009, the Committee on Legal Affairs, by 19 votes in favour and no abstentions(1), recommends that your Committee, as the committee responsible, proceed to examine the above proposal in keeping with its suggestions and in accordance with Rule 87.

Yours faithfully,

Klaus-Heiner LEHNE

Encl.: Opinion of the Consultative Working Party.

(1)

Klaus-Heiner Lehne (Chairman), Raffaele Baldassarre, Sebastian Valentin Bodu, Antonio López-Istúriz White, Tadeusz Zwiefka, Luigi Berlinguer, Lidia Joanna Geringer de Oedenberg, Bernhard Rapkay, Evelyn Regner, Alexandra Thein, Diana Wallis, Cecilia Wikström, Jiří Maštálka, Francesco Enrico Speroni, Kurt Lechner, Sergio Gaetano Cofferati, Edit Herczog, Edvard Kožušník, Sajjad Karim.


ANNEX: OPINION OF THE CONSULTATIVE WORKING PARTY OF THE LEGAL SERVICES OF THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COMMISSION

 

 

 

CONSULTATIVE WORKING PARTY

OF THE LEGAL SERVICES

Brussels, 7 October 2009

OPINION

             FOR THE ATTENTION OF THE EUROPEAN PARLIAMENT

                                                              THE COUNCIL

                                                              THE COMMISSION

Proposal for a regulation of the Council on administrative cooperation and combating fraud in the field of value added tax

COM(2009)427 of 18.8.2009 – 2009/0118(CNS)

In the light of the Interinstitutional agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts, particularly point 9 thereof, the consultative working party of the legal services of Parliament, the Council and the Commission held a meeting on 16 September 2009 for the purpose of considering the abovementioned proposal by the Commission, among others.

On examining(1) the proposal for a regulation of the Council intending to recast Regulation (EC) No 1798/2003 of the Council of 7 October 2003 on administrative cooperation in the field of value added tax and repealing Regulation (EEC) No 218/92, the working party noted by common accord that:

(1)  In the introductory words of the first paragraph of Article 22, after the words ‘the following’ (marked with double strikethrough), the words ‘to which it can also have direct access’ should have been included, and the latter words should have been marked with grey-shaded type and double strikethrough.

(2) In Article 31(2), the replacement of the word ‘simultaneous’ with the word ‘multilateral’ which was indicated by substance adaptation markers, should have been indicated by adaptation markers.

Having considered the working document, the working party was thus able to establish, without dissent, that the proposal does not involve any substantive changes other than those identified as such in the text itself or in this opinion. The working party also concluded, as regards codification of the unchanged provisions of the earlier act with those substantive amendments, that the proposal is indeed confined to straightforward codification and does not substantially alter the acts in question.

C. PENNERAJurisconsult

 

J.-C. PIRISJurisconsult

 

L. ROMERO REQUENADirector-General

 

(1)

The working party was able to refer to the English, French, and German versions of the proposal and based its proceedings on the French original version of the working document.


PROCEDURE

Title

Administrative cooperation and combating fraud in the field of value added tax (recast version)

References

COM(2009)0427 – C7-0165/2009 – 2009/0118(CNS)

Date of consulting Parliament

23.9.2009

Committee responsible

       Date announced in plenary

ECON

7.10.2009

Committee(s) asked for opinion(s)

       Date announced in plenary

JURI

7.10.2009

 

 

 

Rapporteur(s)

       Date appointed

José Manuel García-Margallo y Marfil

15.9.2009

 

 

Discussed in committee

2.12.2009

21.1.2010

23.2.2010

 

Date adopted

17.3.2010

 

 

 

Result of final vote

+:

–:

0:

33

0

6

Members present for the final vote

Burkhard Balz, Sharon Bowles, Udo Bullmann, Pascal Canfin, Nikolaos Chountis, George Sabin Cutaş, Leonardo Domenici, Derk Jan Eppink, Diogo Feio, Markus Ferber, Elisa Ferreira, Vicky Ford, José Manuel García-Margallo y Marfil, Jean-Paul Gauzès, Sylvie Goulard, Enikő Győri, Othmar Karas, Wolf Klinz, Jürgen Klute, Rodi Kratsa-Tsagaropoulou, Astrid Lulling, Hans-Peter Martin, Ivari Padar, Antolín Sánchez Presedo, Olle Schmidt, Edward Scicluna, Peter Simon, Peter Skinner, Theodor Dumitru Stolojan, Kay Swinburne, Marianne Thyssen, Ramon Tremosa i Balcells

Substitute(s) present for the final vote

David Casa, Sari Essayah, Robert Goebbels, Syed Kamall, Philippe Lamberts, Olle Ludvigsson, Thomas Mann, Catherine Stihler, Zoran Thaler

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