# EUR-Lex - 52012PC0465 - EN

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# 52012PC0465

**Amended proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing an action programme for taxation in the European Union for the period 2014-2020 (Fiscalis 2020) and repealing Decision N°1482/2007/EC /* COM/2012/0465 final - 2011/0341/b (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

On 29 June 2011, the Commission adopted a
proposal for the next Multi-Annual Financial Framework for the period 2014-2020[1]: a budget for delivering the
Europe 2020 Strategy proposing among others a new Fiscalis 2020 programme. This
programme will contribute to the Europe 2020 Strategy for smart,
sustainable and inclusive growth[2],
by strengthening the functioning of the tax systems within the Member States
and the Union's Single Market. By facilitating the evolution of national tax
administrations towards e-tax administrations, the new programme
also contributes to the establishment of a digital Single Market ('Digital
Agenda for Europe').

The smooth functioning of taxation
systems in the internal market is dependent on effective and efficient
processing of cross-border transactions by national tax administrations, the
prevention of and fight against tax fraud and protection of tax revenues. This
implies exchange of large quantities of information between tax
administrations, but also tax administrations working more efficiently and at
the same time reducing the administrative, economic and time burden for tax
payers involved in cross-border activities. This can only be achieved on the
basis of cooperation between tax administrations of the
Member States and third parties. Given the increasing globalisation, an
efficient fight against fraud should equally have an international dimension.
Therefore, the programme will also support the exchange of information with
non-Member States in the realm of the international agreements concluded with
the non-Member States concerned.

The proposed programme will support the cooperation
mainly between the tax authorities and, if appropriate, other parties
concerned. It is the successor programme of the Fiscalis 2013 programme which
ends on 31 December 2013. The proposed Fiscalis 2020 programme
will support tax cooperation in the Union clustered around human networking and
competency building, on the one hand, and IT capacity building on the other
hand. The first cluster allows for the exchange of good practices and
operational knowledge amongst the Member States and other countries
participating in the programme. The latter enables the programme to fund appropriate
IT infrastructure and systems that allow tax administrations in the Union to
evolve to fully-fledged e-administrations. The main added-value of the
programme is generated by enhancing the capacity of Member States in fighting
fraud and possibly raising revenue, while cutting costs in developing the tools
for these purposes.

2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS

2.1.        Consultations and
expertise

In the context of the midterm evaluation of
the Fiscalis 2013 programme[3],
a contractor analysed the effectiveness, efficiency, relevance and value added
of the programme. Monitoring data available from the different activities was
used.

Another contractor carried out a study of
the possible framework of the future Fiscalis programme[4]: including a comprehensive
analysis of future challenges and structural problems of the taxation systems
in the internal market. The findings of this study were discussed with the
representatives of the participating countries in a workshop organised in June 2011.
In preparation of this workshop, a roundtable was organised in spring 2011 in
the relevant programme Committee[5]
meeting where participating countries were asked to identify the main strengths
of the programme and how the efficiency of the programme could be improved.

Considering the importance of the
activities related to the exchange of information, a separate study was carried
out on the future implementation strategy for the exchange of information. This
study was presented in a workshop for Chief Information Officers of tax
administrations in June 2011.

An impact assessment was prepared analysing
the continuation of the Fiscalis programme and approved by the Impact
Assessment Board on 22 September 2011.

Recommendations for design and further
improvements of the programme were taken on board in the development of the
future programme proposal. The programme objectives put, for instance, more
emphasis on reduction of administrative burdens on tax administrations and
taxpayers, improving cooperation with third countries and third parties, and
also at reinforcing the fight against tax fraud. In addition the programme
proposal includes new tools to address new challenges, notably new joint action
types, the improvement of the availability of the results of the programme
activities taking advantage of online collaboration methods and defining a
framework to better monitor the outputs of the programme.

2.2.        Impact assessment

Considering the overall policy context and
problems ahead for taxation in the next decade, a number of policy options has
been analysed and compared in the impact assessment accompanying the present
programme.

(1)
Baseline: continuing
the programme with the current objectives and design.

(2)
No continuation of the programme: the programme would be discontinued and EU funding will no longer be
provided for IT tools, joint actions or training activities supporting
cooperation in the taxation area.

(3)
Upgrade the baseline: This option would encompass the baseline scenario tailoring the objectives to the future challenges. It puts
additional focus on the fight against tax fraud, avoidance and evasion, working
towards a more efficient tax administration, addressing the high administrative
burden for taxpayers and tax administrations and considering the cooperation
with third countries and third parties.

(4)
Upgrade and cater for new policies: Besides addressing the problems described under the option
"upgrading the baseline scenario", this policy option would offer the
means to extend cooperation to new areas that may follow from policy
evolution and notably enable the programme to have the means to facilitate
coherent application and implementation of this new legislation and to
implement the related exchange of information and administrative cooperation.

The impact assessment identified option 3 "Upgrade
the baseline" as the preferred option. It is in line with the proposal
for a new budget for Europe 2020 and scores best on acceptability by Member
States.

3.           LEGAL ELEMENTS OF THE PROPOSAL

3.1.        Legal basis

The proposed Fiscalis 2020 programme
provides mechanisms, means as well as the necessary funding aiming to improve
cooperation between tax administrations. The proposed measure comprises inter
alia joint actions such as seminars, workshops, training, multilateral controls,
establishment of expert teams etc. in which Member States and their officials
may participate on a voluntary basis. The overall aim of those joint actions is
to enhance administrative cooperation and improve the administrative capacity
of Member States in the area of taxation which justifies the use of article
197 TFEU.

An important part of the Fiscalis 2020
programme concerns the support of the exchange of information between Member
States in the framework of administrative cooperation in the taxation area in
the European Union. The relevant Union legislation on administrative
cooperation provides for the use by the Member States of the European Information Systems. The present programme specifies that
the Commission together with the participating
countries shall ensure that those systems are developed, operated and
appropriately maintained. In this context, it foresees IT capacity building, by
the Union, through the development, maintenance, operation and quality control
of the Union components of the said systems. These single components will be
used by Member States instead of a variety of differing devices. Provision is
also made for the coordination of the establishment and functioning of the
Union and non-Union components of the systems, with a view to ensure their
operability, interconnectivity and continuous improvement. These IT capacity
building aspects justify that the programme also relies on article 114
TFEU.

Given the increasing globalisation of the
economy, the administrative cooperation with developed
third countries is essential to efficiently fight
against tax fraud. To simplify and facilitate the
technical cooperation between those countries and the Member States and to
improve the security of the current exchange of sensitive information in the
context of bilateral tax agreements, the Union should conclude agreements with developed third countries to allow the use
of the Union components of the European Information Systems by these countries.
Therefore article 212 TFEU is used as a supplementary third legal base.

3.2.        Subsidiarity and Proportionality

Action at Union level rather than at
national level is necessary for the following reasons:

·
It is not sufficient to adopt tax legislation at
European level, taking it for granted that its implementation will run smoothly
and if not, the infringement procedure will be sufficient. In order to
efficiently implement EU and national tax law, cooperation and coordination at
the European level are necessary.

·
The challenges identified cannot be tackled if
Member States are not looking beyond the borders of their administrative
territory and cooperate intensively with their 26 counterparts. Without intense
cooperation and coordination between Member States, unfair tax competition and
tax shopping would increase, while fraudsters would exploit the lack of
cooperation between national authorities. The Fiscalis 2020 programme,
implemented by the Commission, offers Member States a Union framework to
develop these cooperation activities, which is more cost efficient than if each
Member State would set up its individual cooperation framework on a bilateral
or multilateral basis.

·
The Fiscalis 2020 programme also supports the highly
secured dedicated communication network allowing the exchange of information in
the framework of administrative cooperation, both for direct and indirect
taxation. The programme as such interconnects national tax administrations in
approximately 5 000[6]
connection points. This common IT network ensures that every national
administration only needs to connect once to this common infrastructure to be
able to exchange any kind of information. If such an infrastructure were not
available Member States would have to link 26 times to the national systems of
each of the other Member States.

The Commission shall for the purpose of
implementing the programme, according to Article 17 TEU, exercise coordinating,
executive and management functions, as laid down in the Treaties. The Fiscalis
2020 programme is therefore in line with the principles of subsidiarity and
proportionality (as set out in Art. 5 of the Treaty of the European Union
(TEU).

3.3.        Instrument

In line with the conclusion of the relevant
impact assessment, EU intervention by means of a funding programme
is appropriate. Taking into account the positive feedback resulting from the
midterm evaluation of the Fiscalis 2013 programme, a successor Fiscalis 2020 programme
is being proposed by the Commission.

In accordance with the Commission
legislative policy adopted in the framework of the Multi-Annual Financial
Framework, the successor funding programme is proposed as a regulation.

4.           BUDGETARY IMPLICATION

The timing of
the review of EU funding programmes is linked to the proposal for a new
Multiannual Financial Framework, as amended on 6 July 2012[7]. In
accordance with this proposal, this Regulation on the Fiscalis 2020 programme
contains a budgetary framework of EUR 234.370.000 (in current
prices) for the period of 2014-2020.

The Fiscalis
2020 programme will be implemented by means of a direct central management mode
and in a priority-based manner. Work programmes are established –together with
the stakeholders- stipulating the priorities for a specific period.

5.           OPTIONAL ELEMENTS

5.1.        Annotations to specific
legal provisions

5.1.1.     Chapter I: General
Provisions

The scope of the programme has been
brought in line with recent Union tax legislation meaning that it will not only
cover VAT, excise duties and taxes on income and capital but also other taxes
which are subject of Union tax legislation.

The Fiscalis 2020 programme will be open
for participation to the Member States, Candidate Countries and
potential Candidates. In line with the overall Union policy in this respect,
countries of the European Neighbourhood Policy will also have the possibility
to take part in the programme under certain conditions. Finally, 'external
experts' might also participate in specific actions (e.g. representatives of
other authorities, trade, national and international organisations, and possibly
other experts) if required to realise the programme objectives.

(a)
The objectives of the Fiscalis 2020 programme
address the identified challenges and expected problems for tax policy and
authorities in Europe in the next decade. The overarching objective of the programme
is to strengthen the internal market through efficient and effective taxation
systems. To provide an adequate answer to the future challenges in the tax area
in the Union, the following specific objective has been defined for the
programme: improve the operation of the taxation systems, in particular through
cooperation between participating countries, their tax authorities, their
officials and external experts. The programme will have the following
priorities:to support the preparation, coherent application and effective
implementation of Union tax law

(b)
to fight against tax fraud, tax evasion and tax
avoidance, in particular by enhancing effective and efficient administrative
cooperation and exchange of information

(c)
to contribute to the reduction of administrative
burden on tax administrations and compliance costs for taxpayers

(d)
to work towards efficient tax administration, in
particular as regards tax compliance and administrative capacity of tax
administrations.

(e)
to enhance a coherent application and
implementation of Union tax policy.

(f)
to enhance cooperation with international
organisations, other governmental authorities, third countries, economic
operators and their organisations with a view to fight against tax fraud, tax
evasion and tax avoidance in particular by enhancing effective and efficient
administrative cooperation and exchange of information, increasing tax
compliance and enhancing tax administration.

The setting up of EEAS under the authority
of the High Representative Vice-President (HRVP) will facilitate the objective
to achieve more coherence and coordination in EU dealings with EU partner countries
requiring international cooperation.

5.1.2.     Chapter II: Eligible
actions

The types of actions considered eligible
for programme funding are similar to the ones under the current programme,
namely:

·
Joint Actions pursuing the exchange of knowledge
and good practice between tax officials of the participating countries;

·
European Information Systems (EIS)[8] facilitating the exchange of
information and access to common data ;

·
Training activities leading to human competency
building for tax officials across Europe.

Modifications have been introduced in
certain categories of actions.

·
The Fiscalis 2020 programme will include some
new joint action tools:

·
Expert teams are
structured forms of cooperation, pooling expertise and/or addressing specific
operational activities. They can be set up with a non-permanent or permanent
character and could receive support such as online collaboration services, administrative
assistance and infrastructure and equipment facilities to underpin the
realisation and success of an action.

·
Actions for public administration capacity
building will support tax authorities that face
particular difficulties, be it lacking knowledge, expertise, organisational or
any other deficiencies which can be overcome through tailor-made support
actions provided by fellow countries and or Commission officials.

·
As regards the European Information Systems, the
new programme defines "Union components" as IT assets and services which
concern some or all of the Member States and are
owned or acquired by the Commission. These Union components are described in point
2 of the Annex of the proposed legal act. The "national components"
are all components which are not "Union components". They are
developed, installed and operated by Member States, and thus subject to the
funding and responsibility of Member States.

The redefinition of Union components should be
seen in the light of the changing practice of IT systems development. Currently
each Member State is responsible for the implementation of its national systems
according to common specifications, resulting in 27 developments for each
system, 27 trader interfaces, 27 schedules of development, 27 sets of project
related or operational difficulties, etc. In particular in the light of the
economic and financial crisis, the Commission considers that the development of
IT systems should be done more efficiently.

This evolution aims at improving the consistency
of data and application of rules by gradually moving towards more shared IT
development (knowledge, data, IT components). It will bring improved working
methods for instance through business process modelling, better quality
specifications but also will bring more standardisation for instance
harmonising interfaces for traders. The new approach towards Union components
will limit the risk for divergent development and deployment plans. It also
provides additional means to control the finalisation of the project as common
plans avoid that the slowest member in the development chain determines the
entry in operation of the entire project.

The EIS may also be used to support exchange of
information between non-EU countries and the Member States in the framework of
bilateral tax agreements.

5.1.3.     Chapter IV: Implementation

In order to ensure uniform conditions for
the implementation of this Regulation, implementing powers should be conferred
on the Commission. As such an annual work programme will be adopted in
accordance with the examination procedure referred to in Article 5 of
Regulation (EU) No 182/2011 of the European Parliament and the Council of 16
February 2011 laying down the rules and general principles concerning
mechanisms for control by the Member States of the Commission's exercise of
implementing powers[9].

5.2.        Simplification

5.2.1.     How did the proposal
contribute to simplification?

(g)
Coherence with the financial regulation

The programme proposal is fully coherent with
the financial regulation and its implementing provisions. Grants and
procurement are the main financial instruments used to implement the programme.
The programme incorporates the simplification measures proposed in the
Commission proposal for the revision of the financial regulation, notably the
recourse to lump sums, flat rates and unit costs. In view of the importance of
the processing of subsistence and travel costs paid under the programme, the
programme will introduce simplification measures offered by the new Financial Regulation
in this area.

(h)
Coherence between the Customs and Fiscalis 2013
programmes

The management of the previous Customs and
Fiscalis programmes had been fully aligned based upon identical procurement
rules and grant models, common management guides and IT based systems. The
management model includes clear and simple procedures for organising programme
activities. The programme management team of the Commission is assisted by
programme management teams in the different customs and tax administrations
acting as facilitator and first point of contact for customs, respectively
taxation officials in Member States. The management model allows the deployment
of activities, some weeks at the most, reacting quickly to newly emerging needs,
while at the same time guarding coherence between the different activities. The
Member States have expressed their satisfaction with the management model of
the programme in the midterm evaluation[10].

Considering this close alignment of both
programmes and further to the simplification objective of the proposal for the
2014 – 2020 multiannual financial framework[11], the Commission initially
proposed a single FISCUS programme as successor for the Customs and Fiscalis
2013 programmes[12].
In view of the unanimity of Member States being in favour of splitting the
proposed single programme, the Commission, while maintaining its position
against this split, proposed an amended proposal with two legislative texts for
respectively the Customs and Fiscalis 2020 programmes. Notwithstanding the introduction
of these separate legislative texts, maintaining the alignment between both
programmes will remain a priority for the Commission and where appropriate, it
will be further pursued when implementing the Customs and Fiscalis 2020
programmes.

(i)
Did the programme consider externalisation?

The possibility to implement the future programme
through an executive agency was considered. An agency could be empowered
to execute tasks such as the selection of the activities under the programme,
the administrative preparation and follow-up of the activities, monitoring of
the activities, grants and procurement of IT systems. However, such an
executive agency would add an additional layer to the governance structure, increasing
the cost of coordination and checks, complicating and lengthening decision
making by adding new administrative procedures. Also, it would have a negative
impact on the level of know-how within the Commission and increase the risk of
a fragmentation of content versus administrative aspects. This option would not
bring the expected business benefits and has therefore been discarded.

In an alternative scenario, it was also
considered to transfer all relevant IT activities to national
administrations with the exception of the CCN/CSI network and its related
services. In this scenario the risk is very high that gradually it would be
necessary to set-up more central governance structures. The resulting impact
would be similar to the effects of the discontinuation of the programmes which
would put at risk the efficiency and effectiveness of tax administrations and
reduce the ability to prevent and detect fraud. Considering the negative
impacts on results and performance, this scenario was also discarded.

(j)
Does the programme use common IT tools to reduce
the administrative burden on beneficiaries and contractors?

The Customs 2013 and Fiscalis 2013 programmes
already deploy tools to facilitate the management for of the programme
activities and related expenditure through a common Activity Reporting Tool (ART2).
This will be continued.

5.2.2.     Performance measurement of
the proposal

The performance of the programme will be
measured using a coherent set of performance, impact, result and output
indicators linked to the general and specific objectives and priorities of the
programme and building the link with the Commission Management Plan. The
detailed list of impact, result and output indicators is available in the
Impact Assessment. The Commission has identified targets for some outputs of
the programme, others will be completed through actions within the Fiscalis
2013 programme. The targets of all outputs will be identified before the start
of the Fiscalis 2020 programme by the Commission and presented to the programme
Committee .

5.2.3.     Is the programme proposal
coherent with overall Commission policy

The programme will contribute towards the
objectives of the Europe 2020 Strategy by strengthening the Single Market,
enhancing the productivity of the public sector and sustain technical progress
and innovation in administrations, and by promoting employment. It will support
flagships on the digital agenda for Europe[13],
the flagship initiative on the Innovation Union[14], the flagship on the Agenda
for New Skills and Jobs[15]
and the flagship initiative on an industrial policy for the globalisation era[16]. The programme will also
support the Single Market Act[17].
As concerns the protection of the financial interests of the Union and Member
States, the programme will support collaborative efforts to fight
tax fraud.

2011/0341/b (COD)

Amended proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

establishing an action programme for
taxation in the European Union for the period 2014-2020 (Fiscalis 2020) and
repealing Decision N°1482/2007/EC

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 114, 197 and 212
thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[18],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)       The
multi-annual action programme for taxation which applied before 2014 has
significantly contributed to facilitating and enhancing cooperation between tax
authorities within the Union. The value added of this programme has been
recognised by the tax administrations of the participating countries[19]. The
challenges identified for the next decade cannot be tackled if Member States are
not looking beyond the borders of their administrative territory and cooperate
intensively with their 26 counterparts. The Fiscalis 2020 programme,
implemented by the Commission, offers Member States a Union framework to
develop these cooperation activities, which is more cost efficient than if each
Member State would set up its individual cooperation framework on a bilateral
or multilateral basis. It is therefore appropriate to ensure
the continuation of this programme by establishing a new programme in the same
area.

(2)       The
programme activities, i.e. the European Information Systems, the joint actions
for tax officials and the common training initiatives, are expected to contribute
to the realisation of the Europe 2020 Strategy for smart, sustainable and
inclusive growth[20].
In providing a framework for activities which strive for more efficient tax
authorities, strengthen the competitiveness of businesses, promote employment
and contribute to the protection of the Union's financial and economic
interests, the programme will actively strengthen the functioning of the
taxation systems in the internal market.

(3)       The scope of the Fiscalis
2020 programme should be brought into line with current needs so as to allow
for supporting activities in regard to all taxes harmonised at Union level and to
Union legislation in relation to taxation. This programme should therefore not
only cover taxes harmonised at Union level but also other taxes falling within
the scope of Union tax legislation in the meaning of Council Directive
2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of
claims relating to taxes, duties and other measures[21].

(4)       To
support the process of accession and association by third countries, the
programme should be open for the participation of acceding and candidate
countries as well as potential candidates and partner
countries of the European Neighbourhood Policy[22]
if certain conditions are fulfilled. Considering the
increasing interconnectivity of the world economy, the programme continues to provide
for the possibility to involve external experts, such as representatives of
governmental authorities, economic operators and their oganisations or representatives
of international organisations, in certain activities. .

(5)       The programme objectives
take into account the problems and challenges identified for taxation in the
next decade. The programme should continue to play a role in vital areas like
the coherent implementation of Union law, administrative cooperation, the
protection of the financial and economic interests of the Union, enhancing the
administrative capacity of tax authorities. Given the problem dynamics of new
challenges identified, additional emphasis should be put on fighting tax fraud,
reduction of administrative burden and enhancing cooperation with third
countries and parties.

(6)       The programme tools which
applied before 2014 have proven to be adequate and have therefore been
retained. In view of the need for more structured operational cooperation,
additional tools have been added namely expert teams composed of Union and
national experts to perform jointly tasks in specific domains, and public
administration capacity building actions which should provide specialised
assistance to those participating countries needing administrative capacity
building.

(7)       The
European information systems play a vital role in reinforcing the taxation
systems within the Union and should therefore continue to be financed under the
programme. In addition, it should be made possible to include in the programme new
tax related information systems established under Union legislation. European Information Systems should,
where appropriate, be based on shared development models and IT architecture .

(8)       Given
the increasing globalisation, an efficient fight against fraud should equally
have an international dimension. It is therefore useful
to enable the Union to conclude agreements on technical cooperation with developed
third countries to allow those countries to use the Union
components of the European Information Systems to support a secureexchange of
information between them and the Member States in the framework of bilateral
tax agreements.

(9)       Human competency building in the form of common training should
also be realised through the programme. Tax officials need to build up and
update their knowledge and skills required to serve the needs of the Union. The
programme should strengthen the human capacity through enhanced training
support that targets tax officials as well as economic operators. To this end,
the current common training approach of the Union which was mainly based on
central eLearning development should develop into a multi-facetted training
support programme for the Union.

(10)     The programme
should cover a period of seven years to align its duration with that of the
multiannual financial framework laid down in Council Regulation (EU) N° xxx of xxx
laying down the multiannual financial framework for the year 2014-2020[23].

(11)     For the entire duration of the programme, a financial envelope should be
laid down constituting the prime reference, within the meaning of point [17] of
the Interinstitutional Agreement of XX/YY/201Z between the European Parliament,
the Council and the Commission on cooperation in budgetary matters and on sound
financial management, for the budgetary authority during the annual budgetary
procedure.

(12)     In
line with the Commission's commitment set out in its Communication on the Budget
Review of 2010[24]
to coherence and simplification of funding programmes, resources should be
shared with other Union funding instruments if the envisaged programme
activities pursue objectives which are common to various funding instruments
excluding however double financing.

(13)     The
measures necessary for the financial implementation of this Regulation shall be
adopted in accordance with Council Regulation (EC, Euratom) No xxx/20xx of xxx
on the Financial Regulation applicable to the general budget of the European
Communities, and with Commission Regulation (EC, Euratom) No xxx/20xx of xxx
laying down detailed rules for the implementation of Council Regulation (EC,
Euratom) No xxx/20xx of xxx (references of new financial regulation and
implementing act to be added).

(14)     The
financial interests of the Union should be protected through appropriate
measures throughout the expenditure cycle, including the prevention, detection
and investigation of irregularities, the recovery of funds lost, wrongly paid
or incorrectly used and, where appropriate, penalties.

(15)     In order to ensure uniform
conditions for the implementation of this Regulation,
implementing powers should be conferred on the Commission in respect of the
establishment of annual work programmes. Those powers should be exercised in accordance
with Regulation (EU) No 182/2011 of the European Parliament and of the Council
of 16 February 2011 laying down the rules and general principles
concerning mechanisms for control by the Member States of the Commission's
exercise of implementing powers[25].

(16)     The objectives of the
action to be taken, namely establishing a multi-annual programme to improve the
operation of the taxation systems in the internal market cannot be sufficiently
achieved by the Member States. Since theye cannot efficiently perform the cooperation
and coordination necessary to carry out these objectives, the Union may adopt
measures in accordance with the principle of subsidiarity as set out in Article
5 TEU and establish a multi annual programme. In accordance with the principle
of proportionality, as set out in that Article, this Regulation does not go
beyond what is necessary in order to achieve those objectives.

(17)     The Commission should be
assisted by the Fiscalis 2020 Committee for the implementation of the
programme.

(18)     Directive
95/46 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 governs the processing of personal data carried out in the Member States
in the context of this Regulation and under the supervision of the Member
States competent authorities, in particular the public independent authorities
designated by the Member States. Regulation (EU) 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 EU
institutions and bodies and on the free movement of such data, governs the
processing of personal data carried out by Commission within the framework of
this Regulation and under the supervision of the European Data Protection
Supervisor. Any exchange or transmission of information by competent
authorities should be in accordance with the rules on the transfer of personal
data as laid down in Directive 95/46/EC and any exchange or transmission of
information by the Commission should be in accordance with the rules on the transfer of personal data as
laid down in Regulation (EC) No 45/2001.

(19)     This
Regulation should replace Decision N°1482/2007/EC of the European Parliament and of the Council of 11 December 2007
establishing a Community programme to improve the operation of taxation systems
in the internal market (Fiscalis 2013) and repealing Decision No 225/2002/EC[26] . That
Decision should therefore be repealed,

HAVE ADOPTED THIS REGULATION:

Chapter I
General provisions

Article 1
Subject matter

1.           A multi-annual action
programme "Fiscalis 2020" ("the programme") is hereby
established to improve the operation of the taxation systems in the internal
market.

2.           The programme shall cover
the period 1 January 2014 to 31 December 2020.

Article 2
Definitions

For the purpose of this Regulation the
following definitions shall apply:

(1)
" tax authorities" means the
authorities responsible for applying rules on taxation;

(2)
"External experts" means:

(a)
representatives of governmental authorities
including from countries not participating in the programme according to
article 3(2)1 and 3(2)2;

(b)
economic operators and their organisations;

(c)
representatives of international and other
relevant organisations.,

(3)
"taxation" means the following taxes:

(a)
value added tax provided for in Directive
2006/112/EC[27];

(b)
excise duties on alcohol provided for in
Directive 92/83/EEC[28];

(c)
excise duties on tobacco products provided for
in Directive 2011/64/EU[29];

(d)
taxes on energy products and electricity
provided for in Directive 2003/96/EC[30];

(e)
other taxes falling within the scope of Article
2(1)(a) of Directive 2010/24/EU[31].

Article 3
Participation in the programme

1.           Participating countries
shall be the Member States and the countries referred to in paragraph 2
provided the conditions set out in that paragraph are met.

2.           The programme shall be
open to the participation of any of the following countries:

(1)
acceding countries, candidate countries and
potential candidates benefiting from a pre-accession strategy, in accordance
with the general principles and general terms and conditions for the
participation of those countries in Union programmes established in the
respective Framework Agreements, Association Council Decisions or similar
Agreements;

(2)
partner countries of the European Neighbourhood
Policy provided that those countries have reached a sufficient level of
approximation of the relevant legislation and administrative methods to those
of the Union. The partner countries concerned shall participate to the
programme in accordance with provisions to be determined with those countries
following the establishment of Framework Agreements concerning their participation
in Union programmes.

Article 4
Participation in programme activities

External experts may be invited to take
part in selected activities organised under the programme wherever this is
useful for the achievement of the objectives referred to in Article 5. These
experts shall be selected by the Commission,on the basis of their skills,
experience and knowledge relevant to the specific activities.

Article 5
General objective and specific objective

1.           The general objective of
the programme shall be to strengthen the internal market through efficient and
effective taxation systems.

2.           The specific objective of
the programme shall be to improve the operation of the taxation systems, in
particular through cooperation between participating countries, their tax
authorities, their officials and external experts.

3.           The achievement of those
objectives shall be measured on the basis of the following indicators:

(1)
the availability of the Common Communication
Network for the European Information Systems;

(2)
the feedback from participants in programme
actions and users of the programme.

Article 6
Priorities

The priorities of the programme shall be
the following:

(a)
to support the preparation, coherent application
and effective implementation of Union tax law

(b)
to fight against tax fraud, tax evasion and tax
avoidance, in particular by enhancing effective and efficient administrative
cooperation and exchange of information

(c)
to contribute to the reduction of administrative
burden on tax administrations and compliance costs for taxpayers

(d)
to work towards efficient tax administration, in
particular as regards tax compliance, and administrative capacity of tax
administrations.

(e)
to enhance a coherent application and
implementation of Union tax policy.

(f)
to enhance cooperation with international
organisations, other governmental authorities, third countries, economic
operators and their organisations with a view to fight against tax fraud, tax
evasion and tax avoidance in particular by enhancing effective and efficient
administrative cooperation and exchange of information, increasing tax
compliance and enhancing tax administration.

Chapter II
Eligible actions

Article 7
Eligible actions

The programme shall provide, under the
conditions set out in the annual work programme referred to in Article 14,
financial support for the following types of action:

(a)
Joint actions:

(1)
seminars and workshops;

(2)
project groups, generally composed of a limited
number of countries, operational during a limited period of time to pursue a
predefined objective with a precisely described outcome;

(3)
multilateral controls, joint audits and other
activities provided in Union legislation on administrative cooperation
organised by two or more participating countries, including at least one Member
State, to carry out a coordinated control of the tax liability of one or more
related taxable persons;

(4)
working visits organised by the participating
countries or a third country to enable officials to acquire or increase their
expertise or knowledge in tax matters; for working visits organised within
third countries only travel and subsistence (accommodation and daily allowance)
costs are eligible under the programme;

(5)
expert teams, which are structured forms of
cooperation, with a non-permanent or permanent character, pooling expertise to
perform tasks in specific domains or carry out operational activities, possibly
with support of online collaboration services, administrative assistance and
infrastructure and equipment facilities;

(6)
public administration capacity building and
supporting actions;

(7)
studies;

(8)
communication projects;

(9)
any other activity in support of the general and
specific objectives set out in Articles 5.

(b)
IT capacity building: development, maintenance,
operation and quality control, of Union components of European Information Systems
set out in point 1 of the Annex and, new European Information Systems established
under Union legislation

(c)
Human competency building: common training
actions to support the necessary professional skills and knowledge relating to taxation.

Article 8
Specific implementation provisions for joint actions

1.           Participating countries
shall ensure that officials with the adequate profile and qualifications are
nominated to participate in the joint actions.

2.           Participating countries
shall take the necessary measures for the implementation of the joint actions,
in particular by raising awareness on those actions and by ensuring an optimal
use is made of the outputs generated.

Article 9
Specific implementation provisions
for the European Information Systems

1.           The Commission and the
participating countries shall ensure that the European Information Systems
referred to in point 1 of the Annex are developed, operated and appropriately
maintained.

2.           The Commission shall
coordinate, in cooperation with the participating countries, those aspects of
the establishment and functioning of the Union and non-Union components of the
systems and infrastructure referred to in points 1 and 2 of the Annex which are
necessary to ensure their operability, interconnectivity and continuous
improvement.

3.           The use of the union
components of the European Information Systems referred to in point 1 of the Annex
by non-participating countries shall be subject to agreements for technical
cooperation with these countries to be concluded in accordance with Article 218
TFEU.

Article 10
Specific implementation provisions for common training

1.           Participating countries
shall integrate, where appropriate, jointly developed training content,
including e-learning modules, training programmes and commonly agreed training
standards in their national training programmes.

2.           Participating countries
shall ensure that their officials receive the initial and continuing training
necessary to acquire common professional skills and knowledge in accordance
with the training programmes.

3.           Participating countries
shall provide the linguistic training necessary for officials to ascertain a
sufficient level of linguistic competence for participation in the programme.

Chapter III
Financial Framework

Article 11
Financial framework

1.           The financial envelope for
the implementation of the programme shall be EUR 234.370.000 (in current
prices).

2.           The financial allocation
for the programme may also cover expenses pertaining to preparatory,
monitoring, control, audit and evaluation activities which are required for the
management of the programme and the achievement of its objectives; in
particular, studies, meetings of experts, information and communication
actions, including corporate communication of the political priorities of the
European Union as far as they are related to objectives of this Regulation, expenses linked to IT networks
focusing on information processing and exchange, together with all other
technical and administrative assistance expenses incurred by the Commission for
the management of the programme.

Article 12
Types of intervention

1.           The Commission shall
implement the programme in accordance with the Financial Regulation.

2.           Union financial support
for activities provided for in Article 7 shall take the form of:

(1)
grants;

(2)
public procurement contracts;

(3)
reimbursement of costs incurred by external
experts referred to in Article 4.

3.           The co-financing rate for
grants shall be up to 100 % of the eligible costs where the latter are travel
and accommodation costs, costs linked to organisation of events and daily
allowances. That rate shall apply to all eligible actions with the exception of
expert teams. For this category of eligible actions, the annual work programmes
will specify the applicable co-financing rate when these actions require the
awarding of grants.

Article 13
Protection of the financial interests of the Union

1.           The Commission shall take
appropriate measures ensuring that, when actions financed under this Regulation
are implemented, the financial interests of the Union are protected by the
application of preventive measures against fraud, corruption and any other
illegal activities, by effective checks and, if irregularities are detected, by
the recovery of the amounts wrongly paid and, where appropriate, by effective,
proportionate and dissuasive administrative and financial penalties.

2.           The Commission or its
representatives and the Court of Auditors shall have the power of audit, on the
basis of documents and on the spot, over all grant beneficiaries, contractors
and subcontractors who have received Union funds under this programme.

3.           The European Anti-fraud
Office (OLAF) may carry out investigations, including on-the-spot checks and
inspections in accordance with the provisions and procedures laid down in
Regulation (EC) No 1073/1999 of the European Parliament and of the Council of
25 May 1999 and Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996
concerning on-the-spot checks and inspections carried out by the Commission in
order to protect the European Communities' financial interests against fraud
and other irregularities[32]
with a view to establishing whether there has been fraud, corruption or any
other illegal activity affecting the financial interests of the European Union
in connection with a grant agreement or grant decision or a contract concerning
Union funding.

Chapter IV
Implementing powers

Article 14
Work programme

In order to implement the programme the
Commission shall adopt annual work programmes, which shall set out the
objectives pursued, the expected results, the method of implementation and
their total amount. They shall also contain a description of the actions to be
financed, an indication of the amount allocated to each action type and an
indicative implementation timetable. The work programmes shall include for
grants the priorities, the essential evaluation criteria and the maximum rate
of co-financing. This implementing act shall be adopted in accordance with the
examination procedure referred to in Article 15(2).

Article 15
Committee procedure

1.           The Commission shall be
assisted by a committee. That committee shall be a committee within the meaning
of Regulation (EU) No 182/2011.

2.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

Chapter V
Monitoring and Evaluation

Article 16
Monitoring of programme actions

The Commission shall, in cooperation with
the participating countries, monitor the programme and its actions in order to
follow the implementation of actions carried out.

Article 17
Evaluation

1.           The Commission shall
ensure a midterm and final evaluation of the programme,rergarding the aspects
referred to in paragraph 2 and 3. The results shall be integrated into
decisions on possible renewal, modification or suspension of subsequent
programmes. An independent external evaluator shall carry out these
evaluations.

2.           The Commission shall
establish a mid-term evaluation report on the achievement of the objectives of
the programme actions, the efficiency of the use of resources and the European
added value of the programme no later than mid 2018. This report shall
additionally address the simplification, the continued relevance of the
objectives, as well as the contribution of the programme to the Union
priorities of smart, sustainable and inclusive growth.

3.           The Commission shall
establish a final evaluation report on the aspects referred to in paragraph 2
as well as on the long term impact and the sustainability of effects of the
programme no later than end 2021.

4.           The participating
countries shall provide, on request of the Commission, all data and information
relevant for the purpose of contributing to the mid term and final evaluation
reports of the Commission.

Chapter VI
Final Provisions

Article 18
Repeal

Decision No 1482/2007/EC is repealed with
effect from 1 January 2014.

However, financial obligations related to
actions pursued under this Decision shall continue to be governed by this Decision
until their completion.

Article 19
Entry into force

This Regulation
shall enter into force on the twentieth day following that of its publication
in the Official Journal of the European Union.

It shall apply from 1 January 2014.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

ANNEX

European Information Systems and their Union components

1.           The European Information
Systems are the following:

(1)
the common communications network/common systems
interface (CCN/CSI – CCN2), CCN mail3, the CSI bridge,
the http bridge, CCN LDAP and related tools, CCN web portal, CCN monitoring;

(2)
supporting systems, in particular the application
configuration tool for CCN,, the activity reporting tool (ART2), Taxud
electronic management of project online (TEMPO), service management tool (SMT),
the user management system (UM), the BPM system, the availability dashboard and
AvDB, IT service management portal, directory and user access management;

(3)
Programme' information and communication space
(PICS);

(4)
the VAT related systems, in particular, the VAT
information exchange system (VIES) and the VAT refund, including the VIES
initial application, the VIES monitoring tool, the Taxation statistical system,
VIES-on-the-web, VIES-on-the-web configuration tool, the VIES and VAT refund
test tools, the VAT number algorithms, the VAT exchange of eforms, VAT on
e-Services (VoeS); VoeS test tool, VAT eforms test tool;

(5)
recovery related systems, in particular eforms for
recovery of claims, eforms for uniform instrument permitting enforcement (UIPE)
and for uniform notification form (UNF);

(6)
direct taxation related systems, in particular
taxation on savings system, taxation on saving test tool, eforms for direct
taxation, tax identification number TIN-on-the-web, the exchanges related to
the Article 8 of Directive 2011/16/EU and associated test tools;

(7)
other taxation related systems, in particular, the
taxes in Europe database (TEDB);

(8)
the excise systems, in particular the system for
exchange of excise data (SEED), the Excise Movement and Control System (EMCS),
MVS eforms, test application (TA);

(9)
other central systems, in particular, the member
states Taxation information and communication System (TIC), the self-service
testing system (SSTS), taxation related statistics system, the central
application for web forms, the central services / management information system
for Excise (CS/MISE).

2.           The Union components of
the European information systems are:

(1)
IT assets such as the hardware, the software and
the network connections of the systems including the associated data
infrastructure;

(2)
IT services necessary to support the development,
the maintenance, the improvement and the operation of the systems;

(3)
and any other elements which, for reasons of
efficiency, security and rationalisation, are identified by the Commission as
common to participating countries.

LEGISLATIVE FINANCIAL STATEMENT

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.    Title of the proposal/initiative

1.2.    Policy
area(s) concerned in the ABM/ABB structure

1.3.    Nature
of the proposal/initiative

1.4.    Objective(s)

1.5.    Grounds
for the proposal/initiative

1.6.    Duration
and financial impact

1.7.    Management
method(s) envisaged

2.           MANAGEMENT MEASURES

2.1.    Monitoring
and reporting rules

2.2.    Management
and control system

2.3.    Measures
to prevent fraud and irregularities

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.    Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected

3.2.    Estimated
impact on expenditure

3.2.1. Summary of estimated impact on expenditure

3.2.2. Estimated
impact on operational appropriations

3.2.3. Estimated
impact on appropriations of an administrative nature

3.2.4. Compatibility
with the current multiannual financial framework

3.2.5. Third-party
participation in financing

3.3.    Estimated impact on revenue

LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.        Title of the
proposal/initiative

Proposal for a Regulation
of the European Parliament and of the Council establishing an action programme
for taxation in the European Union for the period 2014-2020 (Fiscalis 2020) and
repealing Decision N°1482/2007/EC.

1.2.        Policy area(s) concerned
in the ABM/ABB structure[33]

1405 Taxation Policy

1.3.        Nature of the
proposal/initiative

 ̈ The
proposal/initiative relates to a new action

 ̈ The
proposal/initiative relates to a new action following a pilot
project/preparatory action[34]

X The
proposal/initiative relates to the extension of an existing action

 ̈ The
proposal/initiative relates to an action redirected towards a new action

1.4.        Objectives

1.4.1.     The Commission's
multiannual strategic objective(s) targeted by the proposal/initiative

The proposed programme
will contribute to the Europe 2020 Strategy for smart, sustainable and
inclusive growth[35]
by (1) strengthening the functioning of the Single Market, (2) providing a
framework to support activities enhancing productivity of the public sector and
(3) pushing technical progress and innovation in national and European tax
administrations.

The programme will in
particular support the flagship initiative on the digital agenda for
Europe[36],
the flagship initiative on the Innovation Union[37] and the flagship initiative on
an industrial policy for the globalisation era[38].
It will support the national tax administrations to become fully-fledged e-tax
administrations and also contributing to the reduction of the administrative
burden on taxpayers, by making the implementation of Union tax legislation
smarter.

The programme will
also support the Single Market Act[39]
in particular some key areas for taxation policy emphasised in this legal act
and those concerning diminishing the burden on taxpayers. The upcoming policy
initiatives which the programme will support and help implement, such as the
proposed Energy Tax Directive, new VAT strategy, and Common Consolidated
Corporate Tax Base for companies and those concerning the removal of
cross-border tax obstacles for citizens, will, when adopted, contribute substantially
to achieving objectives of the Single Market Act.

1.4.2.     Specific objective(s) and
ABM/ABB activity(ies) concerned

Specific objectives and ABM/ABB activity(ies) concerned

The ABB activity concerned is Taxation Policy (1405).The specific
objectives of the programme will be the following:

To improve the operation of the taxation
systems, in particular through cooperation between participating countries,
their tax authorities, their officials and external experts

1.4.3.     Expected result(s) and
impact

Specify the effects
which the proposal/initiative should have on the beneficiaries/groups targeted.

The proposed programme aims to improve cooperation between tax
administrations and provide mechanisms and means for improving such cooperation
as well as the necessary funding to achieve these objectives. As such the
programme will not, when implemented by the Commission, result in a further
harmonisation of national tax systems but it will allow the reduction of negative
effects related to the co-existence of 27 different tax systems, such as fraud,
distortions of competition, administrative burden for administrations and
businesses, tax shopping, etc. The proposed measure is therefore a clear internal
market support measure as it will allow the improvement of the functioning of
the various tax systems within the internal market

Whereas it is the Member States' responsibility to manage the
operation of national tax systems, it is clear from the challenges identified in
the impact assessment of the proposal that increased administrative cooperation
between tax authorities –to an even greater degree than is currently the case -
is necessary. Cooperation across the EU enables tax
authorities to develop synergies, avoid duplication and exchange good practice
in all fields related to taxation such as business engineering, IT,
international cooperation, etc. The support to taxation cooperation by the
current Fiscalis 2013 programme has demonstrated its merits, and this
experience will be very valuable to respond to the future challenges in
particular the outdated technological architecture, difficulties in working
together on an operational level with regard to specific tasks, unequal
financial means to support the activities of tax authorities and difficulties
in establishing structural collaboration with the main stakeholders of the tax
authorities.

1.4.4.     Indicators of results and
impact

Specify the
indicators for monitoring implementation of the proposal/initiative.

Monitoring of the programme's activities will be carried out in
order to ensure that the rules and procedures for the implementation of the
programme have been applied properly and to verify if the programme is
successful in achieving its objectives. A monitoring framework will be put in
place, including: an intervention logic, a
comprehensive set of indicators, measurement methods, a data collection plan, a
clear and structured reporting and monitoring process and midterm and final
evaluations.

The performance of the programme will be measured using a coherent
set of performance, impact, result and output indicators linked to the general
and specific objectives and priorities of the programme and building the link
with the Commission Management Plan. The detailed list of impact, result and
output indicators is available in the Impact Assessment. DG TAXUD has
identified targets for some outputs of the programme. For some others though
this is not yet feasible at this point in time. The targets of those outputs will
be identified before the start of the Fiscalis 2020 programme by DG TAXUD and
presented to the programme Committee for endorsement in the framework of the
Annual Work programme procedure.

The general and specific objective will be measured among
others through the availability of the Common Communication Network for the
European Information systems and will have as target a 97% availability.

1.5.        Grounds for the
proposal/initiative

1.5.1.     Requirement(s) to be met in
the short or long term

The proposal contributes to the Europe 2020 strategy and the
implementation of various other Union legislations as elaborated under chapter
1.4.1

1.5.2.     Added value of EU
involvement

It is more beneficial to initiate actions at the Union level than at
the level of 27 Member States as described in detail in chapter 3.2 of the
explanatory memorandum.

1.5.3.     Lessons learned from
similar experiences in the past

From an economic point of view, action at EU level is much more
efficient. The backbone of the taxation cooperation is a highly secured
dedicated communication network which is operational since the first tax
cooperation programmes in the early 90's. It interconnects national tax
administrations in approximately 5.000[40]
connection points. This common IT network ensures that every national
administration only needs to connect once to this common infrastructure to be
able to exchange any kind of information. If such an infrastructure were not
available tax administrations in the Member States would have to link 26 times
to the national systems of each of the other Member States.

Other cornerstones of the programme are activities that bring
taxation officials together with the purpose of exchanging best practices, to
learn from each other, analyse a problem or draft a guide, for instance. If
Member States would have had to learn from each other by developing their own
activities outside the programme umbrella, they would all have developed their
own set of tools and ways of work. Synergies between activities would have been
lost and common activities would not have been implemented systematically at
the level of 27 Member States. It is much more efficient to have, with the
support of the programme, the Commission acting as activity broker between
the participating countries.

Another important value added is one of an intangible nature. The
programme has been instrumental in creating a sense of common interest,
stimulating mutual trust and generating a cooperation spirit between
Member States and Member States and the Commission in the area of taxation.

1.5.4.     Coherence and possible
synergy with other relevant instruments

The management of the Fiscalis 2020 and Customs 2020 programmes will
be aligned whenever possible. The programmes share a common network for the
implementation of European IT Systems, a common platform for online
collaboration (PICS) and a common tool for the Activity Reporting (ART2).
Methodologies applied for the Human Capacity Building are also shared between
the two programmes.

The Midterm evaluation of the DG HOME programmes on Prevention of
and Fight against Crime (ISEC) and Prevention, Preparedness and Consequence
Management of Terrorism & other Security Related Risks (CIPS)[41] considers the Customs and
Fiscalis 2013 programme management model "offers the most promising
prospects for improving the management of ISEC/CIPS as it allows to promptly
and flexibly respond to operational needs".

The backbone for trans-European IT systems is the CCN/CSI network,
also being used by OLAF for the exchange (and storage) of information on
irregularities and fraud. For this purpose both DGs benefit from economies of
scale.

1.6.        Duration and financial
impact

X Proposal/initiative of limited
duration

–
 ̈  Proposal/initiative in effect from 01/01/2014 to 31/12/2020

–
X  Financial impact
2014 to 2023 (from 2021 to 2023 only for payment appropriations

 ̈ Proposal/initiative of unlimited
duration

–
Implementation with a start-up period from YYYY
to YYYY,

–
followed by full-scale operation.

1.7.        Management mode(s)
envisaged[42]

X Centralised direct management by the
Commission

 ̈ Centralised indirect management with the delegation of implementation tasks to:

 ̈         executive agencies

 ̈         bodies set up by the Communities[43]

 ̈         national public-sector bodies/bodies with public-service
mission

 ̈         persons entrusted with the implementation of specific
actions pursuant to Title V of the Treaty on European Union and identified in
the relevant basic act within the meaning of Article 49 of the Financial
Regulation

 ̈ Shared management with the Member States

 ̈ Decentralised management with third countries

 ̈ Joint management with international organisations (to be specified)

If more than one
management mode is indicated, please provide details in the
"Comments" section.

Comments

/

2.           MANAGEMENT MEASURES

2.1.        Monitoring and reporting
rules

Specify frequency
and conditions.

Monitoring of the programme's activities
will be carried out in order to ensure that the rules and procedures for the
implementation of the programme have been applied properly (audit function).
The proposals for joint action activities are monitored on a permanent basis
through an online database, Activity Reporting Tool (ART2), which contains the
proposals and their corresponding activities. The same tool allows the
beneficiaries of the grants issued under the programme, namely the Member
States tax administrations, to report online the expenses financed from the
grant to participate in the joint action activities. Annually Member States
have to sent a financial report to the Commission which using the Activity
Reporting Tool.

For the IT and Training Capacity Building activities that are
financed through procurement, the standard reporting and monitoring rules
apply.

The programme will be evaluated twice. The results of the midterm evaluation
will be available by mid-2018 and those of the final evaluation of the
programme towards the end of 2021. Member States, as main beneficiaries of the
programme will do an important part of the data collection either by providing
information at the level of the individual tools (mainly through ART2) or on
the wider impact of the programme (either by participating in perception
measuring exercises or through the issuing of reports).

Up to now, evaluation exercises of the existing programmes, predominantly
addressed primary stakeholders of the programme, namely tax authorities and
their experts which are the target audience of the programme. Considering the
importance of consulting also stakeholders that are external to the programme
(i.e. economic operators) on the impacts the programme has on them and to what
extent they benefit for instance from better cooperation between /tax
administrations, this dimension of indirect impacts will be included in future
programme evaluations.

2.2.        Management and control
system

2.2.1.     Risk(s) identified

The potential risks for the implementation of the grants are related
to:

–
Incorrect implementation of the grant agreement
signed with the consortium of the Member States and Candidate Countries. The
level of risk is considered low, since the beneficiaries are public
administrations of the participating countries

–
Member States declare expenses for an activity
that is not approved under the programme

–
Member States declare twice the same expenses

The potential risks for the implementation of the contracts are
related to :

–
Non-respect of procurement rules

–
Payment of an invoice for a non-existing
deliverable

2.2.2.     Control method(s) envisaged

The main elements of the control strategy applied are:

1. Financial controls common for all expenditure areas:

Ex-ante verification of commitments:

All commitments in DG TAXUD are verified by the head of the HR and
Finances Unit. Consequently, 100% of the committed amounts are covered by the
ex-ante verification. This procedure gives a high level of assurance as to the
legality and regularity of transactions.

Ex-ante verification of payments:

All payments are ex-ante verified according to financial regulations
and established procedures. This in-depth control is performed by a financial
verificator and an authorizing officer.

In addition at least one payment (from all categories of
expenditures) per week is randomly selected for ex-ante in-depth verification
performed by the head of the HR and Finances Unit. There is no target
concerning the coverage, as the purpose of this verification is to check
payments "randomly" in order to verify that all payments were
prepared in line with the requirements. The remaining payments are processed
according to the rules in force on a daily basis.

Declarations of the AOSD:

All the Authorising Officers by Sub-Delegations sign declarations
supporting the Annual Activity Report for the year concerned. These
declarations cover the operations under the programme. The AOSD declare that
the operations connected with the implementation of the budget have been
executed in accordance with the principles of the sound financial management,
that the management and control systems in place provided satisfactory
assurance concerning the legality and regularity of the transactions and that
the risks associated to these operations have been properly identified,
reported and that mitigating actions have been implemented.

2. Additional controls for procurement contracts:

The control procedures for procurement defined in the Financial
Regulation are applied. Any procurement contract is
established following the established procedure of verification by the services
of the Commission for payment, taking into account contractual obligations and
sound financial and general management. Anti-fraud measures (controls, reports,
etc.) are foreseen in all contracts concluded between the Commission and the
beneficiaries. Detailed terms of reference are drafted and form the basis of
each specific contract. The acceptance process follows strictly the TAXUD TEMPO
methodology: deliverables are reviewed, amended if necessary and finally
explicitly accepted (or rejected). No invoice can be paid without an
"acceptance letter".

The procedure of ordering and accepting deliverables covers also
assets management. Each asset is ordered and consequently accepted and encoded into corporate IT tool of the European Commission (ABAC
assets) in its acquisition value. The depreciation is automatic based on
accounting rules of the Commission.

Technical verification for procurement

DG TAXUD performs controls of deliverables and supervises operations
and services carried out by contractors. It also conducts quality and security
audits of their contractors on a regular basis. Quality audits verify the
compliance of the contractors' actual processes against the rules and
procedures defined in their quality plans. Security audits focus on the
specific processes, procedures and set-up.

Ex-post administrative control on both operational and financial
side

At the end of each contract, the whole file is verified by both
operational and financial units before it is formally closed.

3. Additional controls for grants

The grant agreement signed by the beneficiaries of the programme (tax
administrations in Member States and Candidate Countries) defines conditions
applying to the financing of activities resorting under the grant, including a
chapter on control methods. All participating administrations engaged
themselves to respect Commission's financial and administrative rules on expenses.

The activities for which grant beneficiaries can finance
participation from the grants are identified in an online database (ART2 –
Activity Reporting Tool). The Member States report their spending in the same
database which has a number of built in controls to reduce errors. For
instance, Member States can only report expenses for activities to which they
were invited and can only do so once.

In addition to the controls that are built-in in the reporting
system, DG TAXUD performs paper controls and on the spot checks on a sample
basis.These controls are performed ex-post and based on risk-based sampling.

This control strategy allows keeping the administrative burden on
the grant beneficiaries as limited as possible and proportionate to the budget
allocated and risks perceived.

The effect of simplification measures, such as replacing real costs
by lump sums, is likely to be marginal in terms of budgetary gains. Its main
benefit will be at the level of efficiency gains and reduced administraive
burden both in Member States and at the Commission.

4. Costs and benefits of the controls

The controls established enable DG TAXUD to have sufficient
assurance of the quality and regularity of the expenditure and reduce the risk
of non-compliance. The depth of the assessment reaches level three[44] for Joint Actions and level
four[45]
for the procurement contracts. The benefit of the above control strategy
measures is the reduction of the potential risks below 2 % of the overall
budget and it reaches all beneficiaries. Any additional measures for further
risk reduction would result in disproportionate high costs and are therefore
not envisaged. DG TAXUD considers there are no variations between the present
and current programme from control point of view and will apply the same
control strategy for the 2020 programme. The costs entailed to implement the
above control strategy are limited to 2,60 %[46]
of the total budget and is expected to remain at the same ratio.

The programme control strategy is deemed efficient to limit the risk
of non-compliance to below 2% and proportionate with the risks entailed.

2.3.        Measures to prevent fraud
and irregularities

Specify existing or
envisaged prevention and protection measures.

In addition to the application of all regulatory control mechanisms,
the DG will devise an anti-fraud strategy in line with the Commission's new
anti-fraud strategy (CAFS) adopted on 24 June 2011 in order to ensure inter
alia that its internal anti-fraud related controls are fully aligned with
the CAFS and that its fraud risk management approach is geared to identify
fraud risk areas and adequate responses. Where necessary, networking groups and
adequate IT tools dedicated to analysing fraud cases related to the Fiscalis
2020 programme will be set up.

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected

· Existing expenditure budget lines

In order of
multiannual financial framework headings and budget lines.

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Number [Description........................................] || Diff./non-diff. ([47]) || from EFTA[48] countries || from candidate countries[49] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

|| || || || || ||

· New budget lines requested

In order of multiannual financial framework
headings and budget lines.

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Number [Heading............................................] || Diff./non-diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

|| || || || || ||

1 || 14.04.04 – Fiscalis 2020 || Diff. || NO || YES || NO || NO

1 || 14.01.04.05 Fiscalis 2020 – Expenditure on administrative management || Non-diff || NO || NO || NO || NO

3.2.        Estimated impact on
expenditure[50]

3.2.1.     Summary of estimated impact
on expenditure

The costs related to the possible introduction
of a new European IT system, should this be required, implementing the proposal
on the Financial Transaction Tax (FTT), are not included in the budget of the Fiscalis
2020 programme, considering the early stage of the process for the FTT proposal.

EUR million (to 3 decimal places)

Heading of multiannual financial framework: || 1 || Smart and Inclusive Growth

DG: TAXUD || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021-2023 || TOTAL

Ÿ Operational appropriations || ||

14.0404 – Fiscalis 2020 || Commitments || (1a) || 33.310 || 33.310 || 33.310 || 33.410 || 33.410 || 33.410 || 33.510 || || 233.670

Payments || (2a) ||  9.327 || 24.316 || 27.647 || 30.007 || 30.052 || 30.062 || 30.097 || 52.162 || 233.670

Appropriations of an administrative nature financed  from the envelope for specific programmes[51] || ||

14.010405 || || (3) || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || || 0.700

TOTAL appropriations for DG TAXUD || Commitments || =1+1(a)+3 || 33.410 || 33.410 || 33.410 || 33.510 || 33.510 || 33.510 || 33.610 || || 234.370

Payments || =2+2(a)+3 ||  9.427 || 24.416 || 27.747 || 30.107 || 30.152 || 30.162 || 30.197 || 52.162 || 234.370

Ÿ TOTAL operational appropriations || Commitments || (4) || 33.310 || 33.310 || 33.310 || 33.410 || 33.410 || 33.410 || 33.510 || || 233.670

Payments || (5) ||  9.327 || 24.316 || 27.647 || 30.007 || 30.052 || 30.062 || 30.097 || 52.162 || 233.670

Ÿ TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || 0.100 || || 0.700

TOTAL appropriations under HEADING 1 of the multiannual financial framework || Commitments || =4+ 6 || 33.410 || 33.410 || 33.410 || 33.510 || 33.510 || 33.510 || 33.610 || || 234.370

Payments || =5+ 6 ||  9.427 || 24.416 || 27.747 || 30.107 || 30.152 || 30.162 || 30.197 || 52.162 || 234.370

Heading of multiannual financial framework: || 5 || " Administrative expenditure "

EUR million (to 3 decimal places)

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

DG: TAXUD ||

Ÿ Human resources || 4.973 || 4.973 || 4.973 || 4.973 || 4.973 || 4.973 || 4.973 || 34.811

Ÿ Other administrative expenditure || 0.220 || 0.220 || 0.220 || 0.220 || 0.220 || 0.220 || 0.220 || 1.540

TOTAL DG TAXUD || || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 36.351

TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 36.351

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021-2023 || TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 38.603 || 38.603 || 38.603 || 38.703 || 38.703 || 38.703 || 38.803 || ||  270.721

Payments || 14.620 || 29.609 || 32.940 || 35.300 || 35.345 || 35.355 || 35.390 || 52.162 ||  270.721

Estimated
impact on operational appropriations

–
The proposal requires the use of operational
appropriations, as explained below:

Commitment appropriations in EUR million (to 3 decimal
places)

Indicate objectives and outputs ò || || || 2014 || 2015 || 2016 || 2017 ||  2018 || 2019 || 2020 || TOTAL

OUTPUTS

Type of output[52] || Average cost of the output || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Total number of outputs || Total cost

Specific Objective: To improve the operation of the taxation systems in particular through cooperation between participating countries, their tax administrations, their officials and external experts

IT Capacity Building || Number of IT contracts || || Around 20 ||  23.450 || ||  23.450 || ||  23.450 || ||  23.450 || ||  23.450 || ||  23.450 || ||  23.450 || ||  164.150

Joint Actions || Number of events organised || || Around 260 ||  8.550 || ||  8.550 || ||  8.550 || ||  8.550 || ||  8.550 || ||  8.550 || ||  8.550 || ||  59.850

Human Capacity Building || Number of trainings || || Tbc ||  1.310 || ||  1.310 || ||  1.310 || ||  1.410 || ||  1.410 || ||  1.410 || ||  1.510 || ||  9.670

|| || || || || || || || || || || || || || || ||

TOTAL COST || || || || 33.310 || || 33.310 || || 33.310 || || 33.410 || || 33.410 || || 33.410 || || 33.510 || || 233.670

3.2.2.     Estimated impact on
appropriations of an administrative nature

3.2.2.1.  Summary

–
The proposal requires the use of administrative
appropriations, as explained below:

EUR million (to 3
decimal places)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

HEADING 5 of the multiannual financial framework || || || || || || || ||

Human resources || 4.973 || 4.973 || 4.973 || 4.973 || 4.973 || 4.973 || 4.973 || 34.811

Other administrative expenditure || 0.220 || 0.220 || 0.220 || 0.220 || 0.220 || 0.220 || 0.220 || 1.540

Subtotal HEADING 5 of the multiannual financial framework || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 36.351

Outside HEADING 5[53] of the multiannual financial framework || || || || || || || ||

Human resources || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Other expenditure of an administrative nature || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Subtotal outside HEADING 5 of the multiannual financial framework || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

TOTAL || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 5.193 || 36.351

3.2.2.2.  Estimated requirements of
human resources

–
The proposal requires the use of human
resources, as explained below:

Estimate to be expressed in full amounts
(or at most to one decimal place)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020

Ÿ Establishment plan posts (officials and temporary agents)

14 01 01 01 (Headquarters and Commission’s Representation Offices) || 32 || 32 || 32 || 32 || 32 || 32 || 32

14 01 01 02 (Delegations) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

14 01 05 01 (Indirect research) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

10 01 05 01 (Direct research) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Ÿ External personnel (in Full Time Equivalent unit: FTE)[54]

14 01 02 01 (CA, INT, TA, SNE from the "global envelope") || 9 || 9 || 9 || 9 || 9 || 9 || 9

14 01 02 02 (CA, INT, JED, LA and SNE in the delegations) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

14 01 04 05 [55] || - at Headquarters[56] || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

- in delegations || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

14 01 05 02 (CA, INT, SNE - Indirect research) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

10 01 05 02 (CA, INT, SNE - Direct research) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Other budget lines (specify) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

TOTAL || 41 || 41 || 41 || 41 || 41 || 41 || 41

14 is the policy area or budget title
concerned.

The human resources required
will be met by staff from the DG who are already assigned to management of the action
and/or have been redeployed within the DG, together if necessary with any
additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.

Description of
tasks to be carried out:

Officials and temporary agents || Programme management activities, stricto senso[57], and programme implementation activities such as studies, development, maintenance and operation of European IT systems

External personnel || Assistance to programme implementation activities such as studies, development, maintenance and operation of European IT systems

3.2.3.     Compatibility with the
current multiannual financial framework

–
The proposal is compatible the 2020 multiannual
financial framework.

3.2.4.     Third-party contributions

–
The proposal does not provide for co-financing
by third parties

3.2.5.     Estimated impact on revenue

–
The proposal has potentially limited financial
impact on revenue: in case the penalties (mentioned in article 13) are applied,
these will be budgeted as general revenue for the EU budget

[1]               COM(2011)500 Final of 29 June 2011, A budget for Europe
2020.

[2]               COM(2010) 2020 final of 3 March 2010: A strategy
for smart, sustainable and inclusive growth.

[3]               Fiscalis
2013 midterm evaluation: http://ec.europa.eu/taxation_customs/resources/documents/common/publications/studies/fiscalis2013_mid_term_report_en.pdf
_

[4]               DELOITTE,
The future business architecture for the Customs Union and Cooperative Model in
the Taxation Area in Europe.

[5]               Minutes
of the 9th Fiscalis Committee meeting on 3 May 2011

[6]               Customs and Taxation connection points taken together

[7]               COM(2012) 388 final

[8]               Previously called Trans European IT Systems

[9]               OJ L 55, 28.2.2011, p 13.

[10]             The Evaluation Partnership,
Customs 2013 midterm evaluation, page 72 to 80
RAMBOLL, Fiscalis 2013 midterm evaluation, paragraphs 268-305.

[11]             COM(2011), 398 Final of 29 June 2011.

[12]             COM(2011), 706 Final of 9 November 2011.

[13]             COM(2010) 245 Final/2, A Digital Agenda for Europe.

[14]             COM(2010) 546 of 6 October 2010, European 2020
Flagship Initiative Innovation Union.

[15]             COM(2010) 682 of 23 November 2010, An Agenda for new
skills and jobs.

[16]             COM(2010) 614, European 2020 Flagship Initiative
Integrated Industrial Policy.

[17]             COM(2011) 0206 final.

[18]             OJ C , , p. .

[19]             Reference to Final/Mid Term Evaluation(s)

[20]             COM(2010) 2020.

[21]             OJ L 84, 31.3.2010, p. 1.

[22]             COM(2004)373

[23]             To be completed

[24]             COM(2010)700

[25]             OJ 28.2.2011 L 55-13

[26]             OJ L 330, 15.12.2007, p. 1

[27]             OJ L 347, 11.12.2006, p. 1

[28]             OJ L 316, 31.10.1992, p. 21

[29]             OJ L 176, 5.7.2011, p. 24

[30]             OJ L 283, 31.10.2003, p. 51

[31]             OJ L 84, 31.3.2010, p. 1.

[32]             OJ L 292, 15.11.1996, p. 2.

[33]             ABM: Activity-Based Management – ABB: Activity-Based
Budgeting.

[34]             As referred to in Article 49(6)(a) or (b) of the
Financial Regulation.

[35]             COM(2010) 2020 final of 3 March 2010: A strategy
for smart, sustainable and inclusive growth.

[36]             COM(2010) 245 Final/2, A Digital Agenda for Europe.

[37]             COM(2010) 546 of 6 October 2010, European 2020
Flagship Initiative Innovation Union.

[38]             COM(2010) 614, European 2020 Flagship Initiative
Integrated Industrial Policy.

[39]             COM(2011) 0206 final.

[40]             Customs and Taxation connection points taken together.

[41]             COM(2005) 124 of 6 April 2005 has a budget of 745
million euro in the 2007-2013 financial framework.

[42]             Details of management modes and references to the
Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

[43]             As referred to in Article 185 of the Financial
Regulation.

[44]             Depth of controls – level three: control with reference
to fully independent corroborative information

[45]             Depth of controls – level four: control with reference
to and including access to the underlying documentation that is available at
the stage of the process in question.

[46]             The cost comprises the number of FTE performing the
controls multiplied by average staff cost; expenditure linked to external
audits, expenditure linked to maintenance of ART system.

[47]             Diff. = Differentiated appropriations / Non-diff. =
Non-Differentiated Appropriations

[48]             EFTA: European Free Trade Association.

[49]             Candidate countries and, where applicable, potential
candidate countries from the Western Balkans.

[50]             Expenditure is expressed in current prices.

[51]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.

[52]             Outputs are products and services to be supplied (e.g.:
number of student exchanges financed, number of km of roads built, etc.).

[53]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.

[54]             CA= Contract Agent; INT= agency staff ("Intérimaire");
JED= "Jeune Expert en Délégation" (Young Experts in
Delegations); LA= Local Agent; SNE= Seconded National Expert;

[55]             Under
the ceiling for external personnel from operational
appropriations (former "BA" lines).

[56]             Essentially for Structural Funds, European Agricultural
Fund for Rural Development (EAFRD) and European Fisheries Fund (EFF).

[57]             The number of posts involved in programme management
activities strictu senso is limited to 18.