EUROPEAN COMMISSION Brussels, 18.12.2017 SWD(2017) 461 final COMMISSION STAFF WORKING DOCUMENT for the evaluation of the use of mutual tax recovery assistance on the basis of Directive 2010/24/EU by the EU Member States Accompanying the document Report from the Commission to the European Parliament and the Council on the operation of the arrangements established by Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures

{COM(2017) 778 final}



1. EXECUTIVE SUMMARY This staff working document on the evaluation of the use of the EU framework for tax recovery assistance accompanies the Commission's report to the European Parliament and the Council, presented in accordance with Article 27 of Directive 2010/24. It examines to which extent the overall objective of this Directive, to better safeguard the financial interests of the Member States and of the EU, has been met (points 2 and 3). The evaluation questions relate to the effectiveness, the efficiency, the relevance, the coherence and the EU added-value of this EU framework (point 4.1.). The evaluation is based on the comments and responses provided by the Member States' tax authorities, the responses provided in a public consultation, the yearly statistics on the use of this EU framework, questions raised in the Recovery Expert Group meetings and in Fiscalis 2020 activities and on some external reports (point 4.2.). The nature of the Directive - providing the legal base and technical tools allowing Member States to assist each other in the recovery of claims, without setting the national recovery rules – makes it difficult to quantify the burden linked to the recovery assistance. This burden is largely influenced by the costs and the workload involved in national recovery processes. Moreover, each recovery case is different and depends on the particular circumstances of the claim. The evaluation therefore only gathered (some) evidence on the costs and burdens within the limitations of the Directive's application and reflecting individual experiences of the recovery officials. That information is duly analysed in the present report. However, any extrapolation allowing an EU-level statement on the regulatory costs related to the Directive is not possible. Although this Directive had to be implemented by 31 December 2011, many Member States were late in transposing the Directive (point 5). The amounts recovered on the basis of the EU Directive continued to increase (point 6.1.1.1.). The statistical data that are made available to the Commission do not permit to draw clear conclusions with regard to the recovery ratio. However, an approximative estimation shows that the differences in the Member States' recovery results are considerable (point 6.1.1.2.). Specific factors are influencing the recovered amounts: the increase of recovery assistance requests; the reported lack of resources and efforts for recovery assistance; and loopholes in the national means for tax recovery (point 6.1.1.3.). It is generally considered that the Directive has helped Member States to create a deterrent effect towards non-compliance. However, this effect cannot really be measured (point 6.1.2.1.). The uniform procedural tools (i.e. the electronic request forms, the uniform instrument permitting enforcement in the requested Member State (UIPE) and the uniform notification form (UNF) are appreciated by the Member States as well as by the few respondents to the public consultation. It is considered that these tools improve the efficiency and effectiveness of recovery assistance for both the applicant and the requested authority. The use of these e-forms and uniform instruments is also generally considered to have a positive effect on reducing the workload and administrative costs for the Member States concerned (points 6.2.1. – 6.2.2.), notwithstanding the increase of assistance requests (requests for information, requests for notification and requests for recovery or precautionary measures) (point 6.2.3.1. – 6.2.3.2.). So far, Member States did not make use of the possibilities for officials of the applicant Member State to be present during administrative enquiries – or to participate in such enquiries – or to assist during court proceedings in the requested Member State (point 6.2.3.3.). The Fiscalis 2020 activities facilitated the cooperation, as they enabled direct contacts between competent authorities. The discussions in these activities also permitted to develop the electronic forms, to provide training to the national officials and to discuss problems and suggestions for improving tax recovery and tax recovery assistance (point 6.2.3.4.). Directive 2010/24 helps to achieve the main priorities of Member States: to improve the revenue collection, reducing tax fraud and evasion, and reducing the administrative burden and costs related to recovery assistance. The mechanism of the EU Directive is considered to permit a much more efficient recovery assistance than other agreements. Given the priority of the Directive and its broad material scope, there is only little use of other agreements for recovery assistance between Member States (points 6.3.1.1. – 6.3.1.3.). The broadening of the scope of this Directive – to all taxes and duties levied by or in the Member States – was appreciated by the Member States, although most requests still relate to the main categories of VAT and income taxes (point 6.3.1.4.). Several suggestions have been made to further extend the scope of the Directive to other claims; to reinforce the possibilities with regard to requests for information, automated and spontaneous exchange of information and access to databases in other Member States; to clarify some notification issues; to further facilitate the use of precautionary measures; to simplify conditions with regard to the obligation to provide assistance; to permit the use of the electronic request forms and the communication network in relations with third countries, etc. (points 6.3.2.1. – 6.3.2.2.). When providing recovery assistance, Member States have to respect the legal protection of the debtor (point 6.3.3.1.). The uniform instruments (UIPE and UNF) are considered to provide sufficient information to the debtors in the phase of recovery assistance. In order to ensure that the debtor is properly informed in a language that he understands, the Commission services also put other common forms at the disposal of the Member States (point 6.3.3.2.). The Commission services provide guidance on the functioning of the EU recovery assistance framework, through information published on the Commission website (point 6.3.3.3.). Tax recovery assistance is considered to be in the interest of all Member States, despite the unequal use and unequal workload (point 6.4.1.1.).

In general, the competent authorities respect the principle of loyal cooperation between EU Member States (point 6.4.1.2.). EU tax recovery assistance appears to be indispensable for the proper functioning of the internal market, and Member States are encouraged to make sure that the recovery assistance framework is effectively used (point 6.4.2.1.). It is considered that the joint EU approach in tax recovery presents many advantages over individual Member States' actions to conclude bilateral or multilateral assistance agreements. The harmonised arrangements, the common request forms and the uniform instruments (UIPE and UNF) considerably facilitate the work for the competent authorities (point 6.4.2.2.). Finally, it is pointed out that the EU tax recovery assistance is coherent with the global strategy of the EU to develop and improve cooperation between Member States (point 6.4.2.3.). 2. INTRODUCTION On 7 April 2016, the Commission presented a Communication to the European Parliament, the Council and the European Economic and Social Committee on an action plan on VAT (document COM(2016)148; Towards a single EU VAT Area – Time to decide). In this action plan, the Commission observed that tackling the VAT gap calls for urgent actions on three fronts: enhancing administrative cooperation, collectively improving the performance of European tax administrations and improving voluntary compliance. These actions also imply a need to use and strengthen mutual assistance for the recovery of tax debts, as effective collection of VAT is a cornerstone of the fight against fraud. Therefore, the Commission announced an evaluation of the use of the current provisions on mutual recovery assistance, which relate to VAT but also to all other types of taxes. This current framework for recovery assistance with regard to VAT, and with regard to all other taxes and duties of any kind levied by or on behalf of a Member State or its territorial or administrative subdivisions, or on behalf of the Union, is laid down in Council Directive 2010/24/EU of 16 March 2010. The purpose of this evaluation is to assess whether and to what extent Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures, and its implementation by the EU Member States have made the recovery assistance more efficient and effective. It will also assess to what extent this recovery assistance needs to/can be improved, and make recommendations to take account of the current needs of the Member States and the internal market in a quickly changing economic and political environment. 3. BACKGROUND TO THE INITIATIVE 3.1. Situation prior to Council Directive 2010/24/EU Arrangements for mutual recovery assistance were first set out in Council Directive 76/308/EEC of 15 March 1976 on mutual assistance for the recovery of claims resulting from operations forming part of the system of financing the European Agricultural Guidance and Guarantee Fund, and of the agricultural levies and customs duties. The scope of this assistance framework was gradually extended to VAT, excise duties, income taxes and taxes on insurance premiums. All other taxes and duties, levied by or on behalf of a Member State or its territorial or administrative subdivisions were still outside the scope. This was at the detriment of the financial interests of the Member States and the neutrality of the internal market. The execution of a continuously increasing number of assistance requests under the former Directive entailed a considerable burden for the requested Member States, as the efficiency and effectiveness of the former framework was not optimal. In the past, there were no electronic request forms with automatic translation of pre-defined text fields. There were also problems with regard to the recognition and translation of instruments emanating from another Member State, which constituted a major cause of the inefficiency of the former arrangements for assistance. This caused delays in both the applicant and the requested Member State.

There was no provision for direct information exchange between services, which could have made assistance fast and efficient, and there was no legal basis for exchange of information without prior request. The conditions for requesting recovery assistance were strict: a request for recovery assistance could only be sent if the domestic means of recovery had been fully exhausted, i.e. if the applicant authority had applied appropriate recovery procedures and the measures taken would not result in the payment in full of the claim (Article 7(2)(b) of Directive 2008/55/EC). Finally, the requested Member State was entitled to recover its costs related to the recovery from the debtor, but these costs could not be deducted from the recovered amounts if a full recovery from the debtor was not possible. This did not encourage Member States to devote sufficient resources to the recovery of other Member States' claims as the costs of the procedure would effectively be borne by the requested Member State if they could not be recovered from the debtor. 3.2. Council Directive 2010/24/EU and its objectives The overall objective of Council Directive 2010/24/EU was to better safeguard the financial interests of the Member States, including their territorial or regional subdivisions and the neutrality of the internal market. In particular, it provided for an extended scope of the recovery assistance and it introduced a range of measures to facilitate cooperation between the EU Member States: it introduced uniform instruments for notification and for recovery in other Member States; it introduced a legal basis for exchange of information without prior request on specific tax refunds; it made it possible for tax officials of a Member State to attend or to participate in administrative enquiries in another Member State; it made it possible to send a request for recovery assistance, even though the domestic means of recovery were not yet fully exhausted, inter alia, where recourse to such procedures in the applicant Member State would give rise to disproportionate difficulty; it provided for clearer and more precise rules where necessary, and it allowed the requested Member State to retain the costs linked to the recovery that it had incurred. 4. EVALUATION QUESTIONS AND METHOD 4.1. Evaluation questions The evaluation is based on the following questions: -to what extent has the Directive contributed to safeguarding financial interests of the Member States and of the EU? (effectiveness) -to what extent have the standardisation provisions of the Directive (e.g. adoption of a uniform instrument permitting enforcement in the requested Member State (UIPE); uniform notification form (UNF); obligation to communicate electronically; rules on the use of language, etc.) improved the efficiency and effectiveness of assistance? (uniformity/efficiency/effectiveness) -to what extent the provisions of the Directive are relevant to the needs of the Member States? (relevance) -could Member States achieve similar results without acting at the EU level and is the EU approach coherent? (EU added value/coherence) 4.2. Evaluation materials 4.2.1. Questionnaire to the tax authorities

a. In order to gather the information necessary for the preparation of this report, the Commission has asked for the opinion of the tax authorities dealing with recovery assistance. All Member States have replied to an evaluation questionnaire, which was sent to them in 2015. It was prepared by the Commission and submitted for discussion and approval of the Recovery Expert Group who also served as the Commission's contact point for distribution of the questionnaire. One set of replies was received per Member State and all Member States took part in the questionnaire. Overall quality and completeness of replies were satisfactory. b. The overview of the Member States' answers to the questionnaire has been published on the Commission's website. 4.2.2. Public consultation a. An open public consultation took place from 30 November 2016 till 8 March 2017. This was prepared by a Commission inter-service steering group. Though the public consultation was announced at several fora and repeated at several occasions, there were only a limited number of responses to this public consultation. In this regard, it should be noted that: - the Directive deals with the cooperation between tax authorities. The execution of a request (= the relationship between the tax authority and the tax debtor) is a matter of national law; - citizens and companies paying their tax debts never have anything to do with the use of this Directive. Recovery assistance is generally only requested in cases where tax debtors deliberately refuse to pay their tax debts. b. A summary report of the responses to this public consultation has been published on the Commission's website. 4.2.3. Yearly statistics a. The replies to the above consultations completed the information already available from the yearly statistics, which Member States have to provide in accordance with Article 27 of the Directive. The statistics cover the number of assistance requests and the amounts requested and recovered. The Recovery Committee adopted a number of detailed guidelines with regard to the calculation of the statistical data. Nevertheless, the statistical data provided by the Member States do not fully match. Differences can be noted, to some extent, in the numbers of the requests sent and received, and, to a large extent, in the requested and recovered amounts reported by the applicant and the requested Member States. The differences in the reported amounts can be partially explained by several factors: assistance requests may lead to payments directly made to the applicant authority, which are not always or not immediately reported to the requested authority; the recovered amounts may be imputed in a different way in case of requests concerning multiple (types of) claims; transfers of recovered amounts by the requested authority at the end of a year may be received by the applicant authority in the next year; the currency exchange may involve some cost; the effects of payment instalment plans is not taken into account in the statistics; and since 2012, the requested Member State is allowed to retain the amount of its costs which are not recovered from the debtor. However, this last element did not apply before 2012, while the statistics of the amounts before 2012 also showed large discrepancies. Under these circumstances, the statistics give an estimation but their accuracy is not fully guaranteed. b. The usefulness of the statistics could be improved if more statistical information would be collected and if the reliability of the statistics could be controlled. However, here the Commission is confronted with several obstacles: - the statistical information that Member States have to provide annually is listed in Article 27(1) of Council Directive 2010/24; Member States may provide any other information that may be useful for evaluating the provision of mutual assistance under this Directive (Article 27(2) of the Directive); - in practice, Member States are reluctant to provide more statistics. They consider this would entail a considerable administrative burden. At present, the only additional statistical information provided by 27 Member States relates to the nature of the claims for which recovery assistance is requested. Additional statistical information may consist of data related to the recovery of customs duties which are own resources for the EU budget; - a complete assessment of the use and the results of this recovery assistance would require information about the amounts effectively paid or recovered (not only in the year of the request itself), about the outcome of contestations of the claims, and about the reasons for non-recovery in specific cases. In principle, the Commission itself does not have access to this additional information.

c. The question about the extent of the statistical reporting obligations could be rediscussed with the Member States, taking into account the administrative burden involved. On this point, it should be noted that a precise estimation of the recovery ratio is extremely difficult, not only because the recovery process extends over several years. It should also be taken into account: - that the amounts mentioned in recovery requests may be amended at a later stage, following a successful contestation of the claim or a remittance of administrative penalties; - that the amounts effectively recovered do not only depend on the recovery efforts of the requested Member State, but also – and perhaps more – on the willingness and the ability of the debtor to pay the claims; - that the requested Member State may receive a request while it is not in the possibility (anymore) to take any recovery measure with regard to the debtor concerned. This is illustrated by the following (negative) example: in 2012, DK sent a request for recovery assistance to BE, relating to a claim dating from 2007, concerning a tax due for the year 2001. In 2012, the debtor concerned was not living in BE anymore, and BE could not recover anything anymore. This sole claim of about 2.500.000 EUR represented about 85 % of all amounts for which DK requested BE's assistance in 2012. A recovery ratio that does not take account of such particularities of individual situations does not give a clear image of the efforts and success of the requested Member State in providing recovery assistance; - that errors in the requests or in the collection of the statistics may affect the results reported. 4.2.4. Other sources a. Discussions on specific questions were held within the Recovery Expert Group meetings. b. The evaluation also took account of ideas and comments expressed in several Fiscalis 2020 project groups and workshops. c. The evaluation also took account of external reports, including the following: -In October 2014, the Belgian Court of Audit submitted to the Belgian parliament (Chamber of representatives) the results of its audit on international mutual assistance for tax recovery. The Court examined whether the Belgian fiscal administration has sufficient legal means at its disposal and is efficiently organised to optimise the international assistance for tax recovery. -On 4-6 June 2009, the European Association of Tax Law Professors held its annual congress in Santiago de Compostela, dealing with "mutual assistance and information exchange". Attention was paid to administrative cooperation in general and also to mutual recovery assistance. The congress report also includes academic reports of 13 EU Member States (Austria, Belgium, Finland, Germany, Hungary, Italy, Luxemburg, the Netherlands, Poland, Portugal, Spain, Sweden, United Kingdom). Although this conference took place before the current Directive of 2010 was adopted, the provisions of the former Directive which were analysed in these national reports are still in force today. 4.3. Evaluation process and matrix a. The evaluation process was managed by a Commission inter-service Steering group on the evaluation of Council Directive 2010/24/EU. b. The evaluation covered all Member States for the entire period from the date from which the provisions of the Directive had to be applied in the Member States (1 January 2012). c. The following evaluation matrix has been used:

Evaluation question Judgment criteria Indicators Data sources 6.1. To what extent has the Directive contributed to safeguarding financial interests of the Member States and of the EU? (EFFECTIVENESS) 6.1.1. Did the Directive help Member States to recover more taxes? 6.1.1.1. Amounts recovered on the basis of the EU Directive statistics 6.1.1.2. Recovery ratio - statistics - questionnaire Member States - reports Member States 6.1.1.3. Factors influencing the recovered amounts - statistics - questionnaire Member States - Fiscalis activities - reports Member States 6.1.1.4. Other use of information provided under the Directive (unintended impact) - questionnaire Member States - Commission services 6.1.2. Did the Directive help Member States to create a deterrent effect towards non-compliance? 6.1.2.1. Member States' view on the 'compliance effect' created by the Directive - questionnaire Member States - public consultation - external sources (tax reviews and magazines, etc.) 6.1.2.2. Exchange of best practices to improve tax compliance - Fiscalis activities 6.2. Did the uniform procedural tools improve the efficiency and effectiveness of recovery assistance? (UNIFORMITY, EFFICIENCY, EFFECTIVENESS) 6.2.1. Is requesting assistance easier than before? (situation of the applicant Member State) 6.2.1.1. Use of the electronic request forms by the applicant authority - questionnaire Member States - evaluation report Belgian Court of Audit 6.2.1.2. Effect of the adoption of the UIPE for the applicant Member State - questionnaire Member States 6.2.1.3. Effect of the adoption of the UNF for the applicant Member State - questionnaire Member States 6.2.1.4. Effect of the extension of the scope on the workload - questionnaire Member States 6.2.2. Is providing assistance for recovery of claims easier than before? (situation of the requested Member State) 6.2.2.1. Effect of the adoption of the UIPE for the requested Member State - questionnaire Member States 6.2.2.2. Effect of the adoption of the UNF for the requested Member State - questionnaire Member States 6.2.2.3. Workload to handle incoming requests for assistance - questionnaire Member States - reports Member States 6.2.2.4. Administrative cost for the requested Member States - questionnaire Member States 6.2.3. Did mutual assistance between the Member States increase? 6.2.3.1. Evolution of the total numbers of requests for mutual assistance - statistics 6.2.3.2. Total number and size of all communications relating to assistance requests - statistics 6.2.3.3. Presence and assistance of officials of the applicant Member State in the territory of the requested Member State - statistics - questionnaire Member States 6.2.3.4. Impact of the Fiscalis activities - questionnaire Member States - Fiscalis activities 6.3. To what extent the provisions of the Directive are relevant to the needs of the Member States? (RELEVANCE) 6.3.1. Did the Directive meet the needs for which it was adopted? 6.3.1.1. Main priorities of Member States with regard to mutual recovery assistance - questionnaire Member States 6.3.1.2. Problems encountered with the Directive by applicant Member States - questionnaire Member States - Recovery Expert Group 6.3.1.3. Problems encountered with the Directive by requested Member States - questionnaire Member States - Recovery Expert Group 6.3.1.4. Effects of the broadening of the scope - questionnaire Member States - reports Member States 6.3.2. Are there other needs? 6.3.2.1. Need for a further extension of the scope? - questionnaire Member States - public consultation 6.3.2.2. Other changes suggested - questionnaire Member States - public consultation - Recovery Expert Group 6.3.3. Did the introduction of the Directive have an impact on the legal protection of the tax debtors in the Member state? 6.3.3.1. The legal protection of the tax debtors - questionnaire Member States - public consultation - other sources 6.3.3.2. Information about tax claims and assistance requests to the debtors - questionnaire Member States - public consultation 6.3.3.3. Guidance on the functioning of the EU recovery assistance framework - questionnaire Member States - public consultation 6.4. Could Member States achieve similar results without acting at the EU level? (EU ADDED VALUE, COHERENCE) 6.4.1. Is recovery assistance in the interest of all Member States? 6.4.1.1. Effective use of the Directive by all Member States - statistics - questionnaire Member States 6.4.1.2. Loyal cooperation between EU Member States - Member States' requests to the Commission services 6.4.2. Does the EU provide incentives to improve tax recovery assistance? 6.4.2.1. EU tax recovery assistance: a cornerstone for the proper functioning of the internal market - external reports - Recovery Expert Group - Fiscalis activities 6.4.2.2. Advantage of a joint EU approach in recovery assistance - questionnaire Member States - Recovery Expert Group - Member States reports 6.4.2.3. Coherence of the EU approach - other sources 5. TRANSPOSITION OF THE DIRECTIVE The Member States had to transpose Council Directive 2010/24/EU by 31 December 2011, and these new provisions had to apply from 1 January 2012 (Article 28 of this Directive). In many Member States, the transposition of this Directive was delayed. Table 1: Overview of transposition of Directive 2010/24/EU in the national legislation of the EU Member States: adoption publication Entry into force BE 09.01.2012 – 21.12.2012 26.01.2012 – 28.12.2012 01.01.2012 BG 07.12.2011 16.12.2011 01.01.2012 CZ 20.12.2011 30.12.2011 01.01.2012 DK 07.02.2012 08.12.2012 15.02.2012 DE 07.12.2011 13.12.2011 01.01.2012 EE 23.11.2011 13.12.2011 01.01.2012 IE 16.12.2011 01.01.2012 EM 10.04.2012 11.04.2012 01.01.2012 ES 30.12.2011 31.01.2012 01.01.2012 FR 25.01.2012 – 28.03.2012 27.01.2012 – 29.03.2012 01.01.2012 HR 14.06.2013 18.06.2013 01.07.2013 IT 14.08.2012 30.08.2012 14.09.2012 CY 29.06.2012 29.06.2012 01.01.2012 LV 15.03.2012 28.03.2012 01.04.2012 LT 20.06.2011 05.07.2011 01.01.2012 LU 21.07.2012 26.07.2012 01.01.2012 HU 08.04.2013 18.04.2013 21.04.2013 MT 01.01.2012 08.05.2012 01.01.2012 NL 08.12.2011 21.12.2011 01.01.2012 AT 07.12.2011 07.12.2011 01.01.2012 PL 11.10.2013 – 06.11.2013 06.11.2013 – 07.11.2013 21.11.2013 PT 20.12.2012 20.12.2012 21.12.2012 RO 31.08.2011 02.09.2011 01.01.2012 SI 30.04.2012 24.05.2012 25.05.2012 SK 30.11.2011 30.12.2011 01.01.2012 FI 29.12.2011 30.12.2011 01.01.2012 SE 15.12.2011 23.12.2011 01.01.2012 UK 19.07.2011 – 09.12.2011 xx.07.2011 – xx.12.2011 01.01.2012 6. ANALYSIS OF THE ANSWERS TO THE EVALUATION QUESTIONS 6.1. To what extent has the Directive contributed to safeguarding financial interests of the Member States and of the EU? (effectiveness) 6.1.1. Did the Directive help Member States to recover more taxes? 6.1.1.1. Amounts recovered on the basis of the EU Directive a. A large majority of Member States (21 of 27) reported that the mutual assistance provided under Directive 2010/24/EU has improved the collection and recovery of their tax claims. Almost all Member States (26 of 27) reported that the cooperation has improved under Directive 2010/24/EU in terms of simplification for national administrations to provide and receive assistance on recovery of claims from another Member State. One Member State (Lithuania) held that it did not have grounds to consider that the growth of the annual recovered amount was linked to changes of the legal framework. In the view of this Member State, the growth of the recovered amounts was caused by an increased number of requests sent to other Member States (see table 2 below). For 2015, the high increase of amounts recovered for Lithuania was caused by a very successful outcome in 3 cases (in which more than 410.000 € was recovered). Table 2: evolution of the numbers of received requests for recovery measures between EU Member States, on the basis of Directive 2010/24 (2011-2016):

It can indeed be expected that the increased number of requests influenced the amounts recovered, but this effect could only be achieved if the Member States were able to cope with the increase of requests. Indirectly, the Lithuanian answer seems to confirm the feeling of other Member States that the new framework helped to facilitate recovery assistance. b. The following table presents an overview of the global evolution of the amounts recovered on the basis of mutual recovery assistance under the EU Directives, in the period 2005-2016: Table 3: total amounts recovered on the basis of the EU tax recovery assistance legislation: recovered by requested Member States at the request of other Member States (before deduction of the own costs relating to the recovery actions of the requested Member State) (in euro) recovered by applicant Member States via requests to other Member States (in euro)



Recovered by requested Member States at the request of other Member States (before deduction of the own costs) Recovered by applicant Member States via requests to other Member States in € in € 2005 17.027.300 19.746.635 2006 33.879.553 40.017.086 2007 24.953.432 30.736.296 2008 32.413.847 39.534.200 2009 42.345.612 31.212.023 2010 44.320.323 41.702.967 2011 54.031.822 62.475.879 2012 30.641.451 32.076.738 2013 35.580.763 41.115.223 2014 42.839.876 46.395.481 2015 81.402.061 65.711.419 2016 76.500.163 67.019.250 b. Following the exceptionally high amounts of recovered claims in 2011, the decrease of the recovered amounts in 2012 can be explained – at least to some extent – by the late implementation of Directive 2010/24/EU in many Member States (see point 5) and the workload generated by the need for the competent authorities to get acquainted with the new legislation, the new procedures, the new request forms and the uniform instruments. The same reasons also caused a decrease in the recovery requests in the same year (see table 2 above). However, in 2013 and 2014 the amounts recovered were again in line with the amounts recovered in 2010, and a further increase followed in 2015 and 2016. c. In 2015, the amounts recovered on behalf of other Member States were considerably higher than the amounts received by the applicant Member States. This may be (partly) due to the full application of Article 20(1) of Directive 2010/24/EU, which allows the requested Member States to deduct their own costs from the recovered amounts (insofar as these costs cannot be recovered from the debtors themselves) before transferring these amounts to the applicant Member State. 6.1.1.2. Recovery ratio a. A clear indication of the recovery ratio, showing the relation between the recovered amounts and the amounts for which recovery assistance is requested, is not possible. The previous reports to the Council and the European Parliament on the use of the former tax recovery assistance Directives contained an estimation of the global recovery ratio. In the past, Member States indeed provided statistics indicating the link between the recovered amounts and the year in which the request concerned was made. This was important to assess the global recovery ratio, as the recovery measures taken in the execution of a request received in a certain year do not produce all their effects in the same year. The recovery ratio can indeed only be assessed over a longer period of time. However, collecting these detailed statistics caused a high administrative burden for the Member States. Directive 2010/24/EU limited the categories of statistical information that Member States are obliged to provide, and it was agreed that the Member States should no longer provide the statistical information needed to assess the global recovery ratio. b. Some other elements shed some light on the real results of the recovery assistance.

First of all, it appears that the evolution of the recovered amounts (2015-2016: x 4 since 2005) is in line with the increase of the amounts for which recovery assistance is requested (2015: x 3 since 2005; 2016: x 4 since 2005; see table 4 below): Table 4: global evolution of the amounts for which recovery assistance was requested (in %, compared to 2005 = 100 %; based on the sent requests): c. One Member State (France) expressed the following opinion of its recovery results: "If we consider the number of requests: about 40 % of them have been followed 2 years later by payments of the debt (complete or partial payment), thanks to the assistance provided by the requested Member State. But if we consider the amount of the requests, the results are not so good. The rate of recovery is about 5 % two years later, sometimes 7 to 8 % (it may vary from year to year), because of high amounts concentrated on a small number of claims. The process works properly for the small amounts, generally concerning border workers. The mutual recovery assistance also has a dissuasive effect on the taxpayers' behaviour, but we are not able to appreciate it accurately. On the other hand, the recovery is difficult for the high amounts because of the disappearance or insolvency of the debtor, long disputes in a fraudulent context, older claims. These claims have often been assessed after a tax audit, with heavy penalties." This French observation corresponds to the conclusions of the Belgian Court of Audit, which made a random survey of the recovery requests received and sent by the Belgian tax authorities: in general, mutual recovery assistance allows to recover the complete claim or nothing at all. d. It was further observed that these difficult cases (fraud, insolvency, etc.) also present major problems for national recovery. Therefore, it is not surprising that these cases also present difficulties for the international recovery assistance. e. Moreover, it was held that very high amounts of taxes and heavy penalties could in some cases be the result of audits based on presumptions and (over)estimations which may not always correspond to the real tax eluded (in particular in situations of VAT fraud) or the real tax paying ability of the tax debtor concerned. f. Although it is not possible to establish a precise recovery ratio, an approximative indication of the requested Member States' results and efforts can be induced from the statistics of the average yearly amount for which assistance requests were received in the period 2013-2016 (table 5a); the average yearly amount recovered by the requested Member State within the same period (table 5b); and the comparison between the preceding figures (table 5c): Table 5a: average yearly amount (in €) for which recovery assistance requests were received in the period 2013-2016, as reported by the requested Member State:



Table 5b: average yearly amount (in €) recovered for other Member States, in the period 2013-2016, as reported by the requested Member State: Table 5c: Percentage of average yearly recovered amounts, compared to the average yearly amounts for which recovery assistance requests are received, both in the period 2013-2016, as reported by the requested Member State:

Table 5c clearly indicates that some Member States effectively recover tax claims on behalf of other Member States (Finland: 26,52 %; the Netherlands: 16,60 %; Sweden: 12,75 %; Ireland: 11,74 %), while 16 of the 28 requested Member States hardly obtain any recovery (Cyprus: 0,05 %; Romania: 0,19 %; Malta: 0,24 %; Bulgaria: 0,26 %; Latvia: 0,50 %; Slovak Republic: 0,51 %; Croatia: 0,63 %; Lithuania: 0,97 %; Hungary: 1,33 %; United Kingdom: 1,34 %; Estonia: 1,50 %; Greece: 1,76 %; Luxemburg: 1,91 %; Austria: 2,03 %; Spain: 2,12 %; Italy: 2,21 %). 6.1.1.3. Specific factors influencing the recovered amounts Increase of recovery assistance requests a. According to Member States' responses, the high and still increasing number of requests for recovery assistance (see table 6) entails an administrative burden. Table 6: total annual numbers of requests for recovery assistance on the basis of Directive 2010/24/EU: Lack of resources and efforts for recovery assistance b. The handling of tax recovery assistance requests thus needs sufficient human resources, just as the handling of internal recovery cases. In their replies to the evaluation questionnaire, 18 Member States observed that the number of requests for recovery from other Member States is very burdensome for them, and 17 Member States expressed their concerns about a lack of resources on the national level (see further under point 6.2.2.3. for an overview of the workload per Member State). Several delegates in Recovery Expert Group meetings or in Fiscalis events also expressed their concerns about the lack of human resources designated to deal with recovery requests from other Member States. In this regard, it is significant that one Member State (Malta) complained that the 1500 € threshold for requests for recovery or precautionary measures – which is imposed by the Directive in order to take account of the workload generated by such requests – is too low, although this Member State yearly received only about 22 requests for recovery (average for the reporting period 2013-2015). The very low recovery rates of several Member States (see table 5c; calculated on the basis of their own statistics) seem to indicate that their difficulties to provide recovery assistance are not only due to the problematic character of the debts and debtors, but also – at least partially – to the limitation of the efforts invested in providing tax recovery assistance. c. The capacities to deal with assistance requests are linked to the willingness to provide recovery assistance. It seems that not all Member States spend sufficient efforts and attention to the assistance requests they receive from other Member States. In their replies to the questionnaire, 10 Member States express the feeling that cross-border recovery assistance is not a priority for tax administrations. Loopholes in the national means for tax recovery d. Another major concern is the availability of appropriate recovery and precautionary measures within the Member States. Articles 13 and 17 of Directive 2010/24/EU provide that the requested authority shall make use of the powers and procedures provided under the laws, regulations or administrative provisions of the requested Member State applying to claims concerning the same or a similar tax or duty. In their replies, a few Member States reported that since 2010 they have introduced legal or administrative amendments to the tax collection and recovery process, which are also relevant for mutual recovery assistance. However, it still appears that the existing powers and procedures do not always ensure an effective and efficient tax recovery, or that the rules concerned are not fit for the recovery of other Member States' claims. In their replies to the questionnaire, several Member States underlined the need to improve tax recovery within the Member States. Specific concerns related to: -legally complex national rules (11 Member States);

-tax officials having no access to some national databases (8 Member States); -national requirements on notification of debtors (7 Member States). The following examples illustrate the concern about national tax recovery weaknesses: - in some Member States, the use of precautionary measures to guarantee recovery of a contested claim appears either not to be permitted or limited. If the tax authorities of the requested Member State do not dispose of (sufficient) precautionary measures to guarantee the recovery of their own contested claims, this implies that these Member States are simply unable to execute requests from other Member States for precautionary measures – although these are considered to be essential in the fight against fraudulent tax debtors; - one Member State observed that if it is requested to provide recovery assistance, the competent recovery agent is obliged to send a notice to the debtor, asking for the payment (irrespective of the notifications already made by the applicant Member State and the payment period already granted by the applicant Member State). Recovery measures can only be started after a (new) payment period which can go from 30 to 150 days; - following a request to seize money on a bank account, a Member State answered that it could not execute such a request unless the full details about the debtor's bank account were provided, i.e. not only IBAN (International Bank Account Number) and BIC (Bank Identifier Code) and name of the bank, but also the exact address of the local bank where this bank account was opened. Following a request for clarification by the Commission services, this Member State has indicated that it cannot guarantee that providing the IBAN and BIC code and the name of the bank is sufficient for the execution of a request to seize money on a bank account in that country; - one Member State claims that requests for recovery should mention the name of the father of the debtor. Otherwise, the execution of the request is problematic. 6.1.1.4. Other use of information provided under the Directive (unintended impact) a. Article 23(1) of the Directive states that the information communicated pursuant to this Directive may be used for the purpose of applying enforcement or precautionary measures with regard to claims covered by this Directive, but also: - for assessment and enforcement of compulsory social security contributions; - for other purposes, in line with Article 23(3) of the Directive (i.e. if, under the legislation of the Member State providing the information, the information may be used for similar purposes). b. A large majority of Member States reported that they do not use this information for other purposes. Some Member States however indicated that this information is or could be useful for other purposes: - for risk analysis and to manage VAT refund cases (Latvia), or for income related regulations (the Netherlands); - for the recovery of non-fiscal debts. In this regard, Belgium observed that the recovery of a wide range of non-fiscal debts is entrusted to the Belgian tax authorities. Sweden observed that the Swedish Enforcement Agency handles both private and public claims regarding the same debtor, so that address information obtained under the tax recovery assistance Directive could also be useful for enforcement of private claims. 6.1.2. Did the Directive help Member States to create a deterrent effect towards non-compliance?

6.1.2.1. Member States' view on the 'compliance effect' created by the Directive a. Ten Member States consider that the existence of the recovery assistance possibilities offered by Directive 2010/24/EU also had a positive effect on the tax payment and tax compliance behaviour in their country. This opinion was also shared by the respondents to the public consultation. However, the deterrent effect of the recovery assistance Directive towards non-compliance cannot be measured exactly. b. The adoption of this Directive was commented in many tax reviews and magazines, and law firms organized seminars and sent notes to inform their clients about this new legislation. The Commission also noted that several web sites and public discussions on web forums paid attention to the adoption of Directive 2010/24/EU and raised awareness about the increasing tax recovery assistance between the Member States. c. It can be presumed that the compliance has also been influenced, at least to some extent, by the information on the growing exchange of information between tax authorities. The worldwide media attention for some bank information leaks, the actions of the EU, the OECD and the G-20 to improve the administrative cooperation between tax authorities, and the attention for voluntary disclosure schemes have contributed to tax compliance in general. It can be presumed that this also had a positive effect on the voluntary payment of taxes. d. However, the response to the public consultation indicated that the awareness could – and should – be further increased by more information actions. The EU is expected to take more actions to explain the legislation on mutual tax recovery assistance (cf. infra, point 6.3.3.3.) and it was also suggested that the tax authorities of the Member States should publish more information about mutual tax recovery assistance on their local websites. More communication about the tools for tax recovery assistance is expected to have an indirect dissuasive effect. e. Finally, there is also a feeling that the existence of the recovery assistance framework does not deter fraudsters who deliberately evade their tax obligations. These debtors can hide assets outside the EU, where they cannot be retraced or seized, while these persons organise their insolvency in the EU Member States. Fraudsters effectively have time to do so, as tax authorities can only resort to tax recovery measures if taxes are not paid spontaneously. Moreover, they probably also count on weaknesses of the internal tax collection systems, which affect the mutual recovery assistance in a negative way. 6.1.2.2. Exchange of best practices to improve tax compliance a. At several Fiscalis 2020 workshops, Member States have discussed specific questions on how to improve tax compliance. Examples: - at the Fiscalis 2020 workshop in Lisbon on 27-28 October 2015, Member States reported and discussed about their experiences with regard to the use of e-services for instalment requests and about the possibilities to share information about disqualification orders, which are considered to have a deterrent effect; - at the Fiscalis 2020 workshop in Brussels on 20-21 May 2017, Member States discussed best practices on the use of behavioural economics technics to increase tax compliance. b. Member States introducing new measures or practices are encouraged to inform other Member States. This information sharing has become a permanent element of Fiscalis 2020 workshops. Important ideas on how to create a deterrent effect towards non-compliance are given special attention in the newsletter that is published regularly. 6.2. Did the uniform procedural tools improve the efficiency and effectiveness of recovery assistance? Council Directive 2010/24/EU introduced the use of a uniform instrument permitting enforcement measures in the requested Member State (UIPE) and a uniform notification form (UNF) for notification of instruments and decisions relating to the tax claims falling within the scope of this Directive. These standardised forms are exchanged in an electronic way, with an automatic translation. The electronic communication also applies to the request forms that are used for sending – and replying to – requests for information, requests for notification, requests for precautionary measures and requests for recovery measures. These forms have also been standardised, allowing an automatic translation. The purpose was to resolve the problems of recognition and translation of instruments emanating from another Member State.

6.2.1. Is requesting assistance easier than before? (situation of the applicant Member State) 6.2.1.1. Use of the electronic request forms by the applicant authority a. A few Member States observed that the current e-forms are quite complex and long. This is the consequence of the Member States' choice to develop e-forms for all types of assistance requests, covering as many situations and standard information/replies as possible, in order to limit the translation needs. b. Each new release of the e-forms is discussed in advance in the Recovery Expert Group, where amendments and improvements are agreed. Moreover, for each new release, a Fiscalis 2020 workshop is organised in order to train the officials that are using the e-forms in practice. 6.2.1.2. Effect of the adoption of the UIPE (Uniform Instrument Permitting Enforcement in the requested Member State) for the applicant Member State a. Almost all Member States explicitly confirm that the adoption of the UIPE had a positive impact on the work of national tax administrations, acting as applicant authority, as it made the preparation of assistance requests easier. For a large majority of Member States (21 of 28), the UIPE also makes preparation of requests for assistance less costly, although two Member States (United Kingdom and Sweden) disagree on this point (without offering further explanation). Almost all Member States also confirm that the UIPE form is complete (meaning that it contains sufficient information to inform the debtor and the requested authority) and that the level of detail in the UIPE form is optimal. b. For the applicant Member States, the biggest advantages of the UIPE over the old paper-based system experienced are: the absence of translation costs (25 of 28), the electronic exchange (24 of 28), the avoidance of recognition issues (17 of 28), the facilitation of the work for the requested Member State (16 of 28) and the use of pre-set fields (15 of 28). Half of the Member States (14 of 28) also consider that the UIPE is less prone to errors. One Member State (Belgium) drew the attention to some other advantages, which were not listed in the possibilities mentioned in the questionnaire: the automatic addition of sums and conversion of currency; the fact that there are no separate attachments to be communicated, since the UIPE is integrated in the request form and automatically filled out from the request form. c. Some Member States observed that the lay-out of the request form and the UIPE could be further improved. This is indeed an on-going process since the start of the development of the electronic request forms. The latest version of the electronic request forms has been made available for use by the Member States from 1 June 2016. This new version takes account of recent Member States' suggestions to make the request forms more user-friendly. d. The opinions of the Member States are divided with regard to the question whether the use of the UIPE saves time. Some Member States (9 of 24 replying Member States) are of the opinion that less time is needed to prepare requests for recovery assistance under the new Directive. The other replying Member States consider that the time needed to prepare such requests is still in line with the time needed before. A number of Member States (6 Member States) did not reply to this question: one Member State could not compare with the previous situation as it only became a Member State after the entry into force of the new system (Croatia); others (Czech Republic, Denmark, Ireland, the Netherlands, Finland) considered that it was difficult to give a precise answer to this question. As observed by some other Member States (Latvia, Luxemburg, Sweden), the time needed indeed largely depends on the specific circumstances of each case: e.g. the number or the details of claims and UIPEs can be very different; there may be co-debtors, etc. 6.2.1.3. Effect of the UNF (uniform notification form) for the applicant Member State a. The adoption of the UNF is generally considered to have a positive impact on the work of the tax authorities which request notification assistance. Most Member States are of the opinion that it makes the preparation of the request easier (22 of 28) and less costly (19 of 28) for the applicant authority. This UNF can be exchanged electronically (20 of 28) and it facilitates a smooth notification process (19 of 28). At the same time, it guarantees that the debtor is well informed (19 of 28), the UNF can be translated in all official languages without translation costs (18 of 28) and there is no need for the applicant authority to explain the purpose of the requested notification in a separate letter to the debtor.

b. No disadvantages were reported. c. 9 Member States reported that the average time needed for the preparation of a request for notification has been reduced, following the introduction of the UNF. These are mostly Member States who needed most time to prepare a notification request before the introduction of the UNF. 6.2.1.4. Effect of the extension of the scope on the workload a. A majority of Member States reported that the broadening of the scope caused an increase of their workload as applicant Member States (16 of 27). b. With regard to the effect on the complexity of the work for the applicant Member State, the Member States' opinions are divided. While some consider that the work has certainly become more complex for the applicant State (13 of 27), others have the feeling that the work has become less complex for the applicant State (8 of 27) and some Member States do not see any real difference on this point (6 of 27). It is unclear why so many Member States expressed an opposite view with regard to the question about the complexity resulting from the enlarged scope: - these different views may be caused by differences in national factors (differences in national organisations, in the number of tax levying authorities within a Member State, and in the number of different procedures for the collection and recovery of different taxes and duties); - they may also relate to the need to use the correct mailboxes for sending assistance requests. In line with the decision of the Recovery Committee, the Commission has set up several mailboxes for the communication of assistance requests, depending on the categories of taxes for which assistance is requested. The purpose of these arrangements was to make sure that a request is directly sent to the mailbox which is managed by the requested authority which is competent to deal with that type of tax. 6.2.2. Is providing assistance easier than before? (situation of the requested Member State) 6.2.2.1. Effect of the UIPE (Uniform Instrument Permitting Enforcement in the requested Member State) for the requested Member State a. The Member States' reports largely confirm that the adoption of the UIPE had a positive impact on the work and the costs of the requested authorities. Almost all Member States (27 of 28) confirm that the UIPE makes processing of assistance requests from other Member States easier. In general, it is felt that the UIPE makes processing of assistance requests from other Member States less costly, that the UIPE form is easy to read and complete, and that its level of detail is optimal. b. For the requested Member States, the biggest advantages of the UIPE over the old paper-based system are: the absence of translation costs (25 of 28); the avoidance of recognition issues (24 of 28); the electronic exchange (23 of 28); the facilitation of the work of the requested Member State (21 of 28), the use of pre-set fields (16 of 28) and the fact that the UIPE is less prone to errors (12 of 28). Other advantages for the requested Member State, not listed in the evaluation questionnaire, were also reported: -automatic addition of sums and conversion of currency (Belgium); -no separate attachments to be communicated, since the UIPE is integrated in the request form and automatically filled out from the request form (Belgium);

-with the UIPE, the execution of a request for assistance can start quickly (Sweden). c. From their position as requested Member States, some Member States have made suggestions to further improve the lay-out of the UIPE, in particular in its printed form. Some suggestions have been taken into account in the 2016 revision of the e-forms. Other suggestions should be taken into account in a further stage of development of the e-forms. In any case, it is at the request of the Member States that the request form for recovery measures and the UIPE were developed in such a way that they can comprise many claims relating to all possible types of taxes and duties. This inevitably leads to a certain complexity. d. It appears that a number of debtors still ask for the initial instrument permitting enforcement in the applicant Member State, as they hold that the UIPE does not contain sufficient details for making an appeal against the claim. It should however be reminded that the UIPE is the legal basis for the recovery measures to be taken by the requested Member State. In principle, such a request for recovery assistance can only be sent after the enforcement measures of the applicant Member State. In this preceding stage, the applicant Member State should already have notified its initial instrument permitting enforcement, in accordance with its national law. Insofar as the applicant Member State cannot notify itself to debtors in other Member States, it can request assistance for the notification of any relevant documents. The availability of notification assistance, implying the use of a uniform notification form (and possibly of an accompanying note to the addressee; see point 6.3.3.2.c.), serves this purpose. As the UIPE is not the first document informing the debtors about the claim, it could not be accepted that the persons concerned just ignore the initial notification. Furthermore, both the UNF and the UIPE contain fields allowing a clear indication of the authorities responsible and the authorities in the applicant Member State where further information about the claim and the contestation possibilities can be obtained if needed. It is up to the applicant Member States to make sure that these contact details are effectively made available to the addressees. e. Eventually, it seems that the introduction of the UIPE did not have a significant impact on the average time that national administrations need to start the execution of a request for assistance. Six Member States reported a reduction of this time. f. With regard to the overall time needed for the execution of a request for recovery assistance, the 2014 report of the Belgian Court of Audit made a quantitive evaluation of the impact of the new arrangements. It appears from this report that, before the introduction of the UIPE, incoming requests for recovery assistance were executed by the Belgian tax authorities within 441 days (on average); while incoming requests received since the implementation of the UIPE were executed within 85 days (on average). 6.2.2.2. Effect of the adoption of the UNF (Uniform Notification Form) for the requested Member State a. A majority of Member States reported that the UNF makes processing of requests for notification coming from other Member States easier (21 of 28). The adoption of the UNF makes it now less costly to execute a notification process (18 of 28). The electronic communication is considered to be a big advantage (24 of 28), as well as the absence of translation costs (21 of 28). Moreover, it saves time to process the request (19 of 28), and the current system is less prone to errors (15 of 28). b. No inconveniences were reported. 6.2.2.3. Workload to handle incoming requests for assistance a. It has already been mentioned that a majority of Member States experience problems with the workload related to the execution of assistance requests, in particular requests for recovery measures (see point 6.1.1.3.). The administrative burden experienced by the requested Member States was different from Member State to Member State. This workload of course depends on the number of tax officials available for handling assistance requests (at the level of the Central Liaison Office and at local level), on the number of requests received by each Member State and on the complexity of the cases for which assistance is requested. b. In 15 Member States (Austria, Belgium, Germany, Greece, France, Hungary, Italy, Lithuania, Luxemburg, the Netherlands, Poland, Romania, Spain, Sweden and United Kingdom), 5 or more FTE (full time equivalent) were dealing at CLO (Central Liaison Office) level with tax recovery assistance for other Member States. In the other Member States, the numbers varied between 0,5 FTE and 3, 5 FTE (0,5 FTE in Estonia and Malta; 1,5 FTE in Denmark, Ireland, Latvia and Slovenia; 2,5 FTE in Portugal and Slovak Republic; 3,5 FTE in Bulgaria, Czech Republic, Cyprus and Finland). c. With regard to the incoming requests for information, the opinions on the administrative burden related to these requests are divided: 11 of 27 consider this is burdensome or somewhat burdensome, while the same number (11 of 27) consider that it is not (very) burdensome.





Table 7: statistical information from the Member States about the number of incoming requests for information (2010 – 2016): Member State considering this number burdensome Member State considering this number somewhat burdensome 2010 2011 2012 2013 2014 2015 2016 BE 68 89 654 398 429 496 505 BG 61 42 61 464 298 300 364 CZ 22 39 69 102 121 99 166 DK 25 29 39 54 67 81 81 DE 289 414 978 1283 1621 1982 1899 EE 14 18 41 71 43 36 53 IE 109 96 129 154 142 138 224 EL 34 38 46 76 96 105 156 ES 294 267 415 491 404 450 600 FR 651 648 657 987 1190 1276 1567 HR 48 55 54 109 IT 100 122 141 300 399 389 544 CY 26 30 22 31 94 67 86 LV 21 19 26 52 69 97 97 LT 48 45 58 63 102 111 129 LU 38 52 74 100 143 167 275 HU 55 64 96 207 343 390 461 MT 5 11 16 15 28 17 36 NL 206 234 411 551 645 625 773 AT 28 21 142 125 207 236 261 PL 250 286 615 891 694 778 830 PT 84 103 119 165 192 226 328 RO 95 72 172 196 534 571 861 SI 11 6 12 39 57 57 84 SK 26 31 118 131 206 127 133 FI 10 16 25 94 79 27 311 SE 43 52 87 95 114 117 186 UK 362 374 858 1067 1616 1714 2511 d. With regard to the incoming requests for notification, a minority of Member States stated that the number of incoming requests made it burdensome or somewhat burdensome for their administration to comply. The statistics on the incoming notification requests show that the feelings on this point do not always coincide with the actual number of requests received (see table 8 below). Cyprus reported that the number of incoming requests for notification is burdensome for its administration, although the number of such incoming requests is relatively low. Malta and Sweden reported that these incoming requests make it somewhat burdensome for their administration to comply, although they also receive a relatively low number of such requests. Table 8: statistical information from the Member States about the number of incoming requests for notification (2010 – 2016): Member State considering this number burdensome Member State considering this number somewhat burdensome 2010 2011 2012 2013 2014 2015 2016 BE 123 97 68 88 140 136 94 BG 4 10 5 22 38 26 67 CZ 39 29 13 47 36 34 36 DK 14 18 20 17 17 17 10 DE 99 148 167 162 208 282 249 EE 2 2 3 11 9 4 11 IE 13 9 16 19 39 47 46 EL 14 9 12 19 15 26 15 ES 76 75 106 116 113 101 120 FR 107 60 72 77 79 71 60 HR 5 11 11 12 IT 85 71 48 66 102 116 100 CY 5 5 3 4 11 9 12 LV 14 21 11 15 39 44 51 LT 52 19 5 39 55 45 43 LU 32 34 18 51 82 80 70 HU 39 71 44 66 83 129 113 MT 1 0 2 8 5 2 2 NL 65 129 54 65 53 62 71 AT 16 39 17 80 38 53 57 PL 142 196 302 595 365 301 280 PT 11 16 16 12 15 22 18 RO 84 51 52 53 81 54 71 SI 8 5 18 9 7 4 12 SK 20 28 10 28 30 35 19 FI 10 0 4 11 3 5 12 SE 23 21 16 21 20 13 36 UK 186 121 221 360 501 439 518 e. With regard to the number of incoming requests for precautionary measures, a majority of Member States (15 of 27; 4 Member States did not express an opinion on this question) considers that the number of incoming requests did not make it burdensome for their administration to comply. This opinion is not surprising, as the number of precautionary measures still remains low for almost all Member States. Only one Member State (France) received a considerable number of precautionary measures (see table 9 below). Four other Member States also stated that the number of incoming requests for precautionary measures made it burdensome (Bulgaria, Malta) or somewhat burdensome (Italy, Lithuania) for their administration to comply, although they received a very low number of such requests in the period 2013-2015: Table 9: statistical information from the Member States about the number of incoming requests for precautionary measures (2013 – 2016): Member State considering this number burdensome Member State considering this number somewhat burdensome

2013 2014 2015 2016 BE 17 7 0 1 BG 1 2 6 2 CZ 0 0 0 0 DK 0 0 1 0 DE 11 9 8 10 EE 0 2 0 1 IE 0 0 0 0 EL 0 1 0 0 ES 8 5 5 15 FR 41 3 66 1 HR 1 1 2 6 IT 2 6 4 4 CY 0 0 2 4 LV 0 0 0 6 LT 0 1 1 0 LU 0 0 0 0 HU 0 3 1 3 MT 2 2 0 2 NL 4 3 2 3 AT 2 10 3 8 PL 5 11 6 5 PT 4 5 4 4 RO 4 2 5 1 SI 0 0 0 0 SK 0 5 4 0 FI 0 0 0 0 SE 0 2 3 0 UK 0 0 0 0 f. With regard to the incoming requests for recovery measures: 18 of 27 Member States reported that the number of incoming requests for recovery made it (at least somewhat) burdensome for their administration to comply.



Table 10: statistical information from the Member States about the number of incoming requests for recovery (2010 – 2016): Member State considering this number burdensome Member State considering this number somewhat burdensome 2010 2011 2012 2013 2014 2015 2016 BE 369 437 340 594 679 714 807 BG 51 56 63 118 159 191 263 CZ 122 128 137 157 170 238 404 DK 70 72 59 60 125 122 102 DE 732 948 1038 1225 1670 1840 1791 EE 197 29 292 350 385 542 330 IE 237 251 175 138 211 240 223 EL 90 91 61 93 82 87 69 ES 624 605 460 452 469 556 681 FR 885 1056 693 1029 1232 1248 1478 HR 22 80 114 129 IT 316 320 198 456 484 703 596 CY 53 42 31 50 67 71 97 LV 72 66 77 63 85 102 107 LT 137 143 160 216 203 202 291 LU 189 235 201 261 448 305 521 HU 139 193 160 320 323 472 436 MT 12 12 9 21 17 27 39 NL 708 815 669 851 1081 1164 1087 AT 51 55 420 607 428 770 834 PL 2050 2725 1125 1445 2978 2525 2509 PT 115 120 109 94 180 192 221 RO 210 167 154 223 341 264 768 SI 25 24 17 44 87 99 160 SK 94 95 90 105 207 318 242 FI 293 20 58 74 101 68 87 SE 44 62 58 56 76 76 116 UK 702 799 807 1267 1755 1519 2015 In this regard, it should be noted that the execution of assistance requests, in particular requests for recovery, cannot be completed immediately. These requests generally require follow-up actions and communications during a longer period, and their complexity may be very different, depending on the specific circumstances of each case. g. A majority of Member States reported that the broadening of the scope caused an increase of their workload as requested Member States (17 of 27). With regard to the effect on the complexity of the work for the requested State, the Member States' opinions are divided. While most Member States consider that the work has certainly become more complex (15 of 27), others consider that the work has become less complex (9 of 27) and some Member States do not notice a significant change (3 of 27). h. Several Member States – in their capacity of requested Member State – also observe that (more) attention should be paid by the competent authorities when they fill out the request form. It seems that requests do not always provide sufficiently detailed information, which leads to additional work for the requested authority. 6.2.2.4. Administrative cost for the requested Member States a. The administrative cost for the requested Member States is linked to the number of incoming requests, but also to the work that they generate. It seems logic to assume that requests for notification only involve a limited action and thus a rather limited cost, just as requests for information, while requests for precautionary or recovery measures may entail higher costs. For most Member States, the reported opinion on the administrative cost is in line with the number of requests actually received. Some Member States however declare that the number of incoming requests makes it (somewhat) burdensome for their administration to comply, while the number of requests received by these Member States is (relatively) low (see tables 7 - 10 above). b. In order to encourage Member States to devote sufficient resources to the recovery of other Member States' claims, Article 20(1) of Council Directive 2010/24/EU introduced the principle that the requested Member State is allowed to retain the costs related to recovery, which are recovered from the debtor. The annual statistics about the recovered amounts show a difference between the amounts recovered by the requested Member States at the request of other Member States, before deduction of the own costs (left column in the table 11 below) and the amounts received by the applicant Member States (right column in the table 11 below). This difference can be explained to some extent by other factors: the statistics recorded by the requested Member State do not take into account the amounts which are directly paid by the debtor or a third party to the applicant Member State; and there may be a certain delay in the transfer of recovered amounts). However, the considerable difference in the statistics for 2015 and 2016 seems to imply that requested Member States effectively use their right to retain their own recovery costs before transferring recovered amounts (insofar as they cannot recover the full amount of outstanding tax claims and their own recovery costs).

Table 11: overview of recovered amounts (2011-2016): Recovered by requested Member States at the request of other Member States (before deduction of the own costs) Recovered by applicant Member States via requests to other Member States in € in € 2011 54.031.822 62.475.879 2012 30.641.451 32.076.738 2013 35.580.763 41.115.223 2014 42.839.876 46.395.481 2015 81.402.061 65.711.419 2016 76.500.163 67.019.250 6.2.3. Did mutual assistance between the Member States increase? 6.2.3.1. Evolution of the total numbers of requests for mutual assistance a. The total numbers of the different types of requests for assistance received by EU Member States from other Member States, on the basis of EU Directives 2008/55/EC and 2010/24/EU, in the period 2011-2016, were as follows: Table 12: total numbers of requests received by all Member States in 2011-2016: Requests for information Requests for notification Requests for precautionary measures Requests for recovery 2011 3218 1284 9566 2012 6081 1323 7661 2013 8250 2066 102 10391 2014 9988 2195 80 14123 2015 10733 2168 123 14769 2016 13630 2205 76 16403 Table 12a: evolution of the numbers of requests for information



Table 12b: evolution of the numbers of requests for notification Table 12c: evolution of the numbers of requests for precautionary measures (information available from 2013)





Table 12d: evolution of the numbers of requests for recovery b. The decrease of recovery requests in 2012 can be explained – at least to some extent – by the late implementation of Directive 2010/24/EU in many Member States (see point 5) and the extra time that the competent authorities needed to get acquainted with the new legislation, the new procedures, the new request forms and the uniform instruments. 6.2.3.2. Total number and size of all communications relating to assistance requests The table below shows a continuous increase of the communications relating to recovery assistance requests since 2013. The majority of these communications relates to income tax claims. Table 13: total number and total size of all messages (requests and follow-up messages) sent by all Member States (2013-2016, and average): Recovery e-mails Year Message number Total size (in MB) Customs duties 2012 18781 3.886,24 2013 14590 2.033,43 2014 17007 2.380,85 2015 15819 2.405,09 2016 15441 2.240,99 Average 16328 2.589,32 Value added tax 2012 26668 4.227,83 2013 21322 2.710,87 2014 33837 3.577,28 2015 38058 4.495,52 2016 46172 5.145,13 Average 33211 4.031,33 Excise duties 2012 4476 400,69 2013 4095 774,86 2014 4663 668,60 2015 3992 492,00 2016 6237 696,06 Average 4693 606,44 Tax on income or capital 2012 70043 7.527,34 2013 51196 4.994,15 2014 68877 6.196,94 2015 68807 6.310,61 2016 81522 7.423,41 Average 68089 6.490,49 Tax on insurance premiums 2012 268 31,76 2013 279 57,29 2014 465 68,88 2015 263 263,28 2016 316 319,47 Average 318 148,14 Inheritance and gift taxes 2012 605 68,77 2013 568 79,90 2014 1331 131,46 2015 973 364,22 2016 1305 469,57 Average 956 222,78 National taxes and duties on immovable property, other than the above-mentioned ones 2012 1704 193,80 2013 1805 156,73 2014 3528 278,46 2015 2779 560,15 2016 3047 619,51 Average 2573 361,73 National taxes and duties on the use or ownership of means of transport 2012 801 82,63 2013 1253 95,01 2014 2122 135,89 2015 2744 362,97 2016 4471 482,88 Average 2278 231,88 Other taxes and duties levied by or on behalf of the (applicant) State 2012 495 63,34 2013 813 122,40 2014 1339 185,32 2015 980 331,82 2016 1284 529,84 Average 982 246,54 Taxes and duties levied by or on behalf of territorial or administrative subdivisions of the (applicant) State, excluding taxes and duties levied by local authorities 2012 422 28,60 2013 1031 119,93 2014 2636 240,20 2015 2794 678,92 2016 3861 733,45 Average 2149 360,22 Taxes and duties levied by or on behalf of local authorities 2012 215 17,56 2013 834 112,50 2014 1383 105,12 2015 934 302,53 2016 1392 419,66 Average 952 191,47 Other tax-based claim 2012 435 10,79 2013 495 60,12 2014 1097 190,32 2015 893 363,75 2016 988 301,07 Average 782 185,21 Refunds, interventions and other measures forming part of the system of total or partial financing of the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD), including sums to be collected in connection with these actions, and levies and other duties provided for under the common organisation of the market for the sugar sector 2012 250 26,59 2013 212 33,07 2014 343 54,70 2015 366 55,93 2016 421 182,19 Average 318 70,50 6.2.3.3. Presence and assistance of officials of the applicant Member State in the territory of the requested State a. Article 7 of Directive 2010/24/EU introduced a possibility for tax recovery officials of one Member State to go to another Member State and to be present during administrative enquiries – or even to participate in these enquiries by interviewing individuals and examining records – and to assist officials of the requested Member State during court proceedings in that State. According to the Directive’s preamble (point 9), this presence or assistance on the territory of another Member State has been rendered possible ‘for reasons of efficiency’. It was considered to be a step forward in recovery assistance, as it could lead to a more active role of the applicant Member State in the assistance process. b. However, it appears that none of these new possibilities has been used yet, for different reasons. -Most Member States reported that they did not yet have a case justifying the application of this measure (18 of 28). A few Member States also invoke other reasons: a lack of budgetary resources (6 of 28) or human resources (3 of 28), the costs of the visit (1 of 28), the fact that officials are not yet aware of this possibility (1 of 28).

-Some Member States (Finland, Czech Republic) pointed out that the implementation of this provision could be complicated, as this presence of national officials on the territory of another Member State requires an agreement between the applicant authority and the requested authority, in accordance with the arrangements laid down by the requested authority. -Two Member States (Finland and Sweden) observe that the use of this measure is not necessary, as the requested Member State's recovery procedure is entrusted, and that it could even be sensitive for the applicant Member State to appear on the spot in order to secure the quality of the recovery in the requested State. 6.2.3.4. Impact of the Fiscalis 2020 activities a. The Fiscalis 2020 activities (project groups and workshops) enlarged and improved the network of the competent national authorities, facilitating subsequent direct contacts that permitted them to solve more easily particular problems or questions concerning specific requests for recovery assistance. b. The discussions in the Fiscalis 2020 activities resulted in a number of suggestions for improving mutual recovery assistance in practice, e.g.: - taxable persons may request refunds of VAT credits in other Member States, in accordance with Directive 2008/9/EU. These refund requests must be introduced in the Member State of establishment, which allows this Member State to check whether the request relates to a taxable person who has outstanding tax debts. A Fiscalis 2020 workshop has allowed to raise the awareness about this seizure and offsetting possibility, and to discuss practical arrangements for the communication between the Member States; - on 11 and 12 September 2014, the Commission organised a Fiscalis 2020 workshop to discuss (1°) the exchange of information between tax enforcement authorities, social security authorities and other public authorities, and (2°) the access to information with regard to the registration of cars, boats and airplanes. It appeared that in most Member States, there was insufficient communication between these authorities, and a lack of access to/exchange of information between them. This also has negative repercussions on the mutual recovery assistance. Following this workshop, the exchange of information with regard to vehicles is currently being discussed within the Recovery Expert Group; - the Fiscalis 2020 workshop discussions on 27-28 October 2015 in Lisbon, which dealt with the use of precautionary measures, finally led to a consensus to complement the electronic request form with information to facilitate precautionary measures in the requested Member State; - at the Fiscalis 2020 workshop in Tallinn on 24-25 May 2016, Member States discussed best practices to retrace missing debtors. c. As the exchange of information on the development of national recovery facilities and instruments is beneficial for all Member States, the Fiscalis 2020 workshops organised since October 2015 explicitly provide an opportunity for all Member States to report (in writing and orally) about new developments in their national tax collection and recovery legislation and practice. d. The Fiscalis 2020 activities were also very useful to develop the electronic version of the request forms, and to provide training to the national officials who have to use these forms. e. Despite the general positive evaluation of the Fiscalis 2020 activities, some concerns exist with regard the unequal level of participation of Member States. Some participants in Fiscalis 2020 workshops assist in a passive way, limiting their contribution to the obligatory elements (a written reply to the questionnaires sent in advance and a (short) presentation of actual developments in their country). The same could be experienced in some Fiscalis 2020 project groups. Some participants also appeared to have serious problems to express themselves in the working language of these meetings. Member States should therefore pay sufficient attention to the selection of their participants in the workshops and their candidates for the project groups. f. The participation in the Fiscalis 2020 workshops is normally limited to one or two persons per Member State. Although participants are invited to report to their national administrations about the information exchanged and the outcome of the discussions in the Fiscalis 2020 activities, there is not always a clear evidence that this information is effectively disseminated and used within the national administrations. Therefore, the Commission services ensure that reports of these workshops (including all presentations, national contributions to questionnaires, and an overview of the conclusions) are put at the disposal of all tax authorities via the dedicated websites. g. Several Member States have expressed the wish to have more guidance on the interpretation and application of the EU rules in this field. It appears that not all tax officials are fully aware of the possibilities and requirements for requesting this assistance. Questions raised in the Recovery Expert Group and questions submitted to the Commission also confirm that the rules and possibilities for recovery assistance are not always clearly understood. Several actions have already been taken to better inform the national tax authorities (e.g. Fiscalis 2020 seminars and workshops, explanatory notes for the national tax authorities, a newsletter on national and international developments in the field of tax collection and recovery and recovery assistance). However, the participation in Fiscalis 2020 events is somehow limited and specific training programs for national authorities could still be useful.





6.3. To what extent the provisions are relevant to the needs of the Member States? 6.3.1. Did the Directive meet the needs for which it was adopted? 6.3.1.1. Main priorities of Member States with regard to mutual recovery assistance a. The main priorities of Member States with regard to mutual recovery assistance are: improving the revenue collection, reducing tax fraud and evasion, and reducing the administrative burden and cost related to recovery assistance. Tax recovery assistance helps directly to achieve these goals, but also indirectly: the existence of recovery assistance has a preventive effect and stimulates tax compliance. b. The main difficulties reported by national administrations with regard to mutual tax recovery assistance fall into different categories: -some are related to the cooperation between the tax authorities of different Member States. Many Member States report they face a lack of staff. The exchange between the countries involved is time-consuming and it may take a long time before replies to assistance requests are received. It is even stated that "some countries" are not really helpful (see point 6.1.1.3.); -other problems relate to the person of the debtor and the specific recovery possibilities. The assets found may be insufficient to recover the whole claim, or it may be difficult to find the debtor and his/her assets; -the assistance also seems to be negatively affected by differences in national legislations and administrative practices (different competences of tax authorities; different conditions for enforcement or precautionary measures; differences in available or accessible information, different limitation period arrangements, etc.). c. The Directive provides for the same types of recovery assistance as other bilateral or multilateral agreements for recovery assistance: requests for information, requests for notification, requests for recovery and precautionary measures. The main differences between the Directive and these other legal instruments relate to the broad scope of the Directive (which is much broader than all other agreements), the use of the uniform instruments and the detailed arrangements for the execution of requests and the communication between the authorities concerned. Several authors have observed that the mechanism of the EU Directive permits a much more efficient regime for assistance in tax recovery than other agreements. d. Article 27(1) of Council Directive 2010/24/EU provides that the Directive is without prejudice to the fulfilment of any obligation to provide wider assistance ensuing from bilateral or multilateral agreements or arrangements, including for the notification of legal or extra-legal acts. In practice, the very wide scope (Article 2), the rather broad conditions for assistance requests (Articles 5, 8, 11 and 16) and the priority rule (Article 27(1)) of the Directive have resulted in a situation where other bilateral or multilateral agreements are rarely used. In fact, most Member States (Austria, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Hungary, Ireland, Italy, Lithuania, Malta, Portugal, Slovenia and Slovak Republic) (almost) never use any other legal instrument for tax recovery assistance with other Member States. e. Some Member States (Belgium, Germany, Greece, France, Italy, Luxemburg, the Netherlands, Poland) however reported that they sometimes use other legal instruments (normally bilateral conventions with specific other Member States; exceptionally the Council of Europe-OECD convention or the Benelux convention) for older claims or for claims below the threshold of 1500 €, as: - the Directive does not oblige Member States to grant assistance if the initial request for assistance is made in respect of claims which are more than 5 – or sometimes 10 years – old, dating from the due date of the claim in the applicant Member State to the date of the initial request for assistance (Article 18(2)); - the Directive does not oblige Member States to take recovery or precautionary measures at the request of other Member States if the total amount of the claims is less than 1500 € (Article 18(3)). This tendency of some Member States to request assistance for older and lower claims on the basis of other legal instruments also raises some concerns: - an efficiency concern: the use of other legal instruments implies the application of other conditions and requirements and thus inevitably increases the complexity for the officials concerned;

- a legal concern: as Article 18 of the Directive does not forbid the requested Member State to provide recovery assistance for older or lower claims, Member States providing recovery assistance for such claims on the basis of a different legal instrument take the risk that tax debtors argue that this recovery assistance is invalid because it is violating the priority of the EU Directive. f. One Member State (the Netherlands) observed that the exchange of information without prior request (Article 6 of the Directive) is now limited to refunds of taxes or duties, other than VAT. This Member State exchanges other information without prior request on the basis of a bilateral tax agreement. 6.3.1.2. Problems encountered with the Directive by applicant States a. No major problems were reported, but several suggestions have been made for further improvement of the EU legislation (see point 6.3.2.). b. Member States regularly make suggestions for the further development of the electronic request forms. These electronic request forms are indeed continuously improved. The latest version is applied by the Member States from 1 June 2016, and a new update has been launched in 2017. The next step should be the introduction of the Central Platform for the e-forms (foreseen for 1 January 2019). 6.3.1.3. Problems encountered with the Directive by requested States a. 13 Member States reported that, as requested States, they do not have major problems with the Directive. b. Other Member States reported that there are some differences in interpretation, and that the broad scope makes it sometimes difficult to define the competent authority. 6.3.1.4. Effects of the broadening of the scope a. The statistics communicated by the Member States make it clear that most recovery assistance cases still relate to VAT and income taxes, i.e. claims for which mutual assistance already existed under the former Directive: Table 14: Nature of the claims for which recovery assistance is requested, on the basis of the amounts of the claims concerned: VAT income/capital taxes customs other taxes and claims 2011 (26 MS) 62,48 % 28,68 % 3,44 % 5,40 % 2012 (26 MS) 42 % 20 % 14 % 24 % 2013 (26 MS) 57,83 % 18,37 % 1,67 % 22,13 % 2014 (27 MS) 26,06 % 41,62 % 7,15 % 25,17 % 2015 (27 MS) 49,73 % 36,98 % 3,88 % 9,41 % 2016 (27 MS) 40,16 % 24,64 % 6,16 % 29,04 % In 2013, 2015 and 2016, the biggest amounts in recovery requests related to VAT; in 2014, direct taxes represented the biggest amount in recovery requests. c. However, most messages are sent from the mailboxes set up for recovery assistance in the field of direct taxes (see table 15 below). On average, the number of messages sent from direct tax mailboxes in the period 2013-2016 was twice as high as the number of messages sent from VAT mailboxes.





Table 15: total number of all messages (requests and follow-up messages) sent by all Member States (2013-2016): claims relating to taxes on income and capital claims relating to VAT claims relating to customs duties other claims d. Of course, the fact that VAT and income/capital taxes represent the biggest tax categories in mutual recovery assistance is not surprising: these taxes are the most important ones, involving the largest amounts. However, a majority of Member States confirmed that it is useful to have the scope of the Directive extended. These Member States (16 of 27) consider that the broadening of the scope has improved the collection of tax revenue via mutual recovery assistance. A considerable number of Member States (10 of 27) also reported that creating the possibility to request recovery assistance for other taxes and duties than those falling within the pre-existing categories has had a positive effect on the payment and collection of these taxes in their own Member State. 6.3.2. Are there other needs? 6.3.2.1. Need for a further extension of the scope? a. Several Member States have suggested a further extension of the scope of the recovery assistance Directive, in order to include other (public) claims for which there is no recovery assistance framework yet (Belgium, Estonia, France, the Netherlands, Portugal, Romania, Spain, Sweden). Several Member States also deplored the fact that recovery assistance for social security claims is organised differently. The current rules concerning assistance for the recovery of social security claims are laid down in different legal instruments, adopted on a different legal basis (Regulations 883/2004 and 987/2009). This social security claims legislation follows the former legislation concerning tax recovery assistance (Directive 2008/55/EC). On 13 December 2016 the Commission has presented a proposal for a Regulation of the European Parliament and of the Council to amend Regulation 883/2004 on the coordination of social security systems and the implementing Regulation 987/2009. If adopted, this new legislation would align the recovery assistance provisions for social security claims to the current rules for tax recovery assistance.

In any case, it is considered to be a disadvantage that the communication network is different, which implies that it is not possible to send joint requests, covering tax and social security claims. The obligation to send two different requests for each type of these claims is an extra administrative burden for the Member States where recovery of taxes and social security claims is done by the same authorities. The Belgian Court of Audit in its report of October 2014 also recommended a further extension of the scope, e.g. to alimony payments (which in Belgium are recovered by the tax authorities if they are not paid spontaneously), and other claims linked to decisions in criminal matters, and social security claims. b. In the replies to the evaluation questionnaire, only 3 Member States (Italy, Luxemburg, Spain) consider that the scope is somewhat unclear. On this point, it can be noted that several questions have also been raised in the Recovery Expert Group, with regard to the possibility to use the Directive for recovery assistance with regard to the following claims: social security claims that are considered as taxes under the national legislation of the Member State concerned, road tolls and user charges, customs penalties, and recovery of illegal state aid consisting in tax exemptions. These questions have been discussed in the Recovery Expert Group and clarifications have been or will be provided in the explanatory notes.



6.3.2.2. Other changes suggested a. Other improvements or amendments of Directive 2010/24/EU have been suggested by Member States. - Requests for information, automated and spontaneous exchange of information and access to databases in other Member States (requested by several Member States) At this moment, Directive 2010/24/EU mainly provides for exchange of information at request (Article 5). Exchange of information without prior request is limited to refunds of taxes other than VAT. Several Member States have asked to extend this legal basis offered by the Directive, in order to allow more spontaneous exchange of information. As Member States increasingly have to deal with tax debtors having assets in one or more other Member States, often in connection with fraudulent constructions to cloud them, several Member States expressed the wish to have more opportunities to exchange information. It has also been suggested to introduce a specific provision on the handling of bulk information requests and to examine whether direct access can or should be granted to specific databases of other Member States, respecting the data protection rules, if these databases are relevant for tax recovery purposes. For debts over a specific value, it has been suggested to introduce a requirement that the applicant State must make a request for information to establish the assets and financial status of the taxpayer before a request for recovery is made. - Notification It has been suggested to confirm that renewed notifications in the phase of recovery or precautionary measures are not needed if the debtor was already notified before. It was also suggested to clarify the indication of third parties in the UIPE and the notification of claims to third parties.

- Facilitating the use of precautionary measures The use of precautionary measures is important, in particular in view of the fight against fraud. At the same time, it is necessary to guarantee the rights of defence of the debtors. The use of precautionary measures should be justified (urgency, proportionality). At present, there is no simple answer to the question whether the justification of such measures can or should be checked by the administrative or judicial authorities of the applicant and/or requested Member State. Several Member States have asked to consider the introduction of a uniform instrument permitting precautionary measures. In this regard, one Member State also observed that decisions for precautionary measures should be executed, irrespective of whether the requested Member State's legislation would allow the same for its own claims. It was further suggested to provide for a swift procedure for freezing and preservation of bank accounts. - Conditions with regard to the obligation to provide assistance Clarifications and amendments have been requested with regard to the conditions relating to the age of the debt, as the current rules of Article 18(2) of the Directive (copied from the former Directive) are considered to be rather complex (suggestion concerning the calculation of the age period; suggestion to avoid the need for comparing national laws; suggestion to abolish this condition or to provide exceptions). Amendments have also been suggested with regard to the threshold, which now only exists for requests for recovery and precautionary measures (suggestion to extend the threshold to information or notification requests). - Other suggestions for specific amendments -suggestion for a provision confirming that the debtor should not be informed about a request for information to another Member State; -suggestion to amend Art. 23 of the Directive, extending the possibilities to use the information communicated pursuant to the Directive (e.g. by confirming explicitly that this information may also be used for the assessment of tax claims); -suggestion to clarify the treatment of costs made by the applicant Member State after sending a request for assistance (which are not mentioned in the request for assistance nor in the UIPE of that request);

-suggestion to facilitate the recovery assistance for recovery of VAT refunds, which is now confronted with the problem that a request for assistance must be sent very quickly, in order to timely block the refund of the VAT in the other Member State (as some Member States execute requests for VAT refunds, made in accordance with Directive 2008/9/EC, within a short time period); -suggestion to improve cooperation between tax authorities in cross-border insolvency procedures (e.g. by providing an obligation to represent tax authorities of other Member States in the insolvency proceedings opened in the own Member State; -suggestions to improve the communication between the competent authorities, e.g. with regard to a reimbursement agreement if recovery measures imply large amounts of costs or in case of unfounded recovery requests (in line with Article 20(2), second subparagraph of the Directive) or with regard to situations where a payment agreement has been concluded between the applicant Member State and the debtor. Some Member States wish to have more precise rules on the communication and cooperation with regard to these matters. -Use of the electronic request forms and the communication network in relations with third countries The electronic request forms for recovery assistance are developed in such a way that they can not only be used for recovery assistance in accordance with Directive 2010/24/EU, but also for recovery assistance based on other legal instruments (bilateral agreements or multilateral agreements). For recovery assistance between EU Member States, this possibility is rarely used, given the broad scope of the Directive. Member States can only use other legal instruments for their recovery assistance in those situations where these other instruments permit them to have a wider recovery assistance than under the conditions of th