COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC90) 183 final - SYN 275 
Brussels, 19 June 1990 
Proposal for a 
COUNCIL REGULATION (EEC) 
concerning administrative cooperation in the field of 
indirect taxation 
If: (presented by the Commission) 
1:;:-
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EXPLANATORY MEMORANDUM 
INTRODUCTION 
1. The creation of an internal market and the elimination 
of fiscal frontiers, as provided for by the Treaty will 
require closer administrative co-operation between Member 
States' fiscal administrations. This is because Member 
States will no longer be able to control intra-Community 
goods for fiscal purposes by means of customs procedures 
linked directly to the crossing of an internal frontier. 
Instead they will need to base their controls of traders' 
accounts principally on standard procedures supported by 
transaction verification systems as they do currently for 
the collection of domestic VAT. This implies that they must 
have the ability to cross check information concerning 
purchases or sales made in other Member States. This can 
only be achieved through enhanced administrative co­
operation. 
The need to strengthen existing provisions for 
administrative co-operation or mutual assistance in the 
field of indirect taxes was explicitly recognized in the 
Commission's fiscal approximation package of 1987. For 
instance, in document COM(87) 323 of 5 August 1987 it was 
proposed "that the existing system of mutual assistance 
should be supplemented by a much more developed and 
comprehensive system of co-operation" (paragraph 9.1). More 
recently, the Member States themselves have publicly 
recognized the need for strengthened systems of 
administrative co-operation, as the conclusions of the 
ECOFIN Council of 13 November demonstrate: "Control 
arrangements must effectively prevent the risk of evasion 
and will be based primarily on the use by national 
administrations of business returns, regular exchanges of 
information and the provision of supporting documents, drawn 
up by the administration. Such standing co-operation at 
administrative level must not give rise to any obstacle on 
grounds of national legislation and will supplement existing 
mutual assistance procedures" (Council doc. 9543/89, para. 
3). 
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CURRENT SITUATION 
2. At present there is no provision in Community legislation 
for mutual assistance in the administration of excise 
duties. As far as VAT is concerned, the legal framework is 
provided by Council Directive 79/1070 EEC which simply 
extends the direct tax provisions of Directive 77/799 EEC to 
VAT. 
3. In addition in the customs and agricultural field, 
Community mutual assistance provisions exist in the form of 
Regulation (EEC) 1468/81 as modified by Regulation (EEC) 
945/87. There are also additional provisions for mutual 
assistance between customs administrations under the Naples 
Convention of 1967, an international treaty between the 
Governments of the Member States which does not form part of 
Community legislation. 
4. The existing legal provisions for mutual assistance at 
Community level provide a good starting point for co­
operation, at least insofar as VAT is concerned. However, 
these provisions have been little used so far because Member 
States have considered that their national fiscal control 
measures, based as they are on import/export documentation, 
could operate satisfactorily in isolation. This situation 
will necessarily change for the reasons indicated in 
paragraph 1 above, and the Commission has concluded that the 
best way of carrying out the Council's mandate to strengthen 
administrative co-operation between Member States in the 
indirect tax field is by means of a new legal instrument. 
This is the subject of the present proposal. 
BASI8 OF THE NEW INSTRUMENT 
5. The new instrument builds on the existing provisions of 
Directive 79/1070 and modifies them where appropriate in 
light of customs experience gained in the operation of 
Regulation 1468/81. The coverage includes excise duties for 
the first time. Where relevant, the provisions of the as 
yet unratified OECD/Council of Europe Convention on Mutual 
Administrative Assistance in tax matters have been taken 
into account. 
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6. The instrument is cast in the form of a regulation rather 
than a directive. This is to ensure greater uniformity in 
the application of the new provisions, and a more rapid 
implementation of its provisions. The proposed regulation is 
based on Article 100a of the Treaty, and therefore requires 
the cooperation of the European Parliament. The opinion of 
the Economic and Social Committee should also be sought. 
UNDERLYING ASSUMPTIONS 
7. It is important from the outset to recognize that after 
1992 administrative co-operation will have a new dimension 
which must be adequately reflected in the new legislative 
instrument. In fact, in the future system there will be two 
distinct but related categories of co-operation. 
8. On the one hand there will be a need to continue and 
extend existing procedures for dealing with cases of fraud 
or serious irregularity. These procedures will continue to 
operate largely on a bilateral basis but will now need to be 
firmly placed in a Community framework and to be legally 
based on a Community instrument. The maintenance of the 
destination principle in the VAT field for a transitional 
period will increase the opportunity for certain types of 
frauds and it is likely that there will be a greater volume 
of fraud-related requests for co-operation. 
9. On the other hand, there will be a requirement for a new 
type of administrative co-operation resulting from the need 
to exchange information on intra-Community VAT and excise 
operations, as indicated in paragraph 1. As far as VAT is 
concerned the point of departure will be the normal control 
procedures using risk assessment techniques and assessment 
of traders' systems that are currently widely employed in 
domestic control. These procedures will need to be 
supplemented insofar as intra-Community trade is concerned 
by techniques for verifying, on a sampling basis, the 
validity of the regular declarations submitted by traders. 
Such verification procedures will form an essential 
component of the control mechanism required for the 
definitive origin-based VAT system after the end of the 
transitional period. Under the transitional system these 
procedures will be equally necessary, to ensure that goods 
for which zero-rating is claimed are duly shipped across 
frontiers and brought under fiscal control in the Member 
State of destination. The temporary retention of a 
destination-based VAT system also requires, in the case of 
triangular traffic, confirmation of the ultimate destination 
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of goods, to ensure that tax accrues to the appropriate 
Member State. Similar co-operation will be required in the 
excise field to ensure the proper functioning of the inter­
linked control system for excise goods on which duty has 
been suspended. 
10. In order to provide an acceptable level of control this 
second type of administrative co-operation will need to be 
organised on a more regular and routine basis and have the 
capacity to handle larger volumes of requests than the 
existing mutual assistance arrangements. In this connection 
the Commission will carry out a feasibility study for an 
inter-active computer and telematics network linking the 
national and Community administrations concerned. A balance 
must be struck in order to take account of the fundamental 
requirement laid down by ECOFIN in November 1989 that the 
burden borne by businesses and administrations must be 
lessened by comparison with the present situation. The 
overall aim is to enable each Member State to have 
reasonable confidence that the tax brought to account by its 
traders on purchases in other Member States is correct, that 
goods intended for export are not diverted to the home 
market, and that invoices or registration numbers are not 
false. It is important to stress that this would not in 
itself be a fraud investigation exercise, although of course 
indications of fraud might emerge as a result of the 
checking process. 
11. The operational details of these systems are a matter 
for subsequent consultation and co-ordination under the 
procedure provided for in the present proposal (Article 19). 
But it is essential at the outset to establish a legal 
framework capable of providing adequately for both 
categories of co-operation mentioned above. Such is the 
purpose of the present proposal. 
ARTICLE 1 
12. This article defines the scope of the Regulation. The 
scope is deliberately broad, and involves co-operation in 
all aspects of compliance with the law on indirect tax 
matters and in the process of correctly assessing the taxes 
in question. 
ARTICLE 2 
13. Paragraph 1 defines the principal terms used in the 
Regulation. 
Paragraph 2 requires each Member State to define the 
authority or authorities which will be responsible for 
administrative co-operation within its territory and to 
communicate a list of these authorities to the other Member 
States and to the Commission. The authorities so defined 
will in effect be the principal operators of the provisions 
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of this Regulation. Paragraph 2 also requires each Member 
State to nominate a central office with responsibility for 
liaison with other Member States and with the Commission in 
matters covered by the present proposal [see also Article 
19(3)]. 
TITLE I 
Administrative co-operation - general provisions 
ARTICLE 3 
14. Article 3 commits the competent authorities to extend 
the fullest possible co-operation to each other and to the 
Commission in ensuring compliance with both national and 
Community provisions in indirect tax matters. The term 
"compliance" is specifically extended to cover the need for 
co-operation in control procedures. As with Article 1, the 
commitment is defined in broad terms and is not limited only 
to the exchange of information. 
Information exchange is, however, the most important 
component of administrative co-operation and this is covered 
by a particular reference in the second part of Article 3. 
A distinction is drawn between the Member States' 
obligations to each other and to the Commission: broadly 
speaking Member States will communicate between themselves 
on matters relating to specific tax cases but will also 
communicate with the Commission on issues likely to be of 
interest at Community level. In order to ensure that such 
information is transmitted effectively and securely, the 
Commission will study the establishment of computer and 
telematic networks linking the national and Community 
administrations concerned. 
ARTICLE 4 
15. This Article contains a standard provision, also to be 
found in Regulation 1468/81 (mutual assistance in the 
customs field), which relieves the competent authorities of 
their obligation to co-operate in the provision of 
information on documents once a particular case or 
investigation has been referred to the prosecuting 
authorities for action before a criminal court. Once 
criminal proceedings have begun any additional 
investigations would have to proceed on the basis of 
arrangements relating to mutual assistance in criminal 
matters (see also Article 21). However, the judicial 
authority in the requested Member State may consent on a 
case-by-case basis to the exchange of information gathered 
in connection with criminal investigations. 
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TITLE II 
Assistance on request 
16. Administrative co-operation falls into three broad 
categories - assistance on request (where the initiative 
lies with the applicant authority), automatic assistance 
(where both applicant and requested authorities agree in 
advance on certain types of information to be collected and 
exchanged automatically), and spontaneous assistance (where 
one authority takes the initiative without being requested 
to do so) . Articles 5-10 deal with assistance on request, 
which is at present the most important of these categories. 
ARTICLE 5 
17. This lays a general obligation on all competent 
authorities to communicate information, broadly defined, 
when requested to do so. Because the initiative in this 
matter lies with the applicant State, which may operate 
certain indirect taxes which are not Community taxes, a more 
precise description of the taxes to be covered by the co­
operation procedures is given at this point. The taxes in 
question are VAT and the major excise duties which are 
applied by all Member States and which are the subject of 
rules laid down at the Community level. The possibility of 
adding other taxes to the list at a later date is not 
excluded. 
In paragraph 2 there is a standard provision requiring the 
requested authority to treat requests from another Member 
State on the same footing it would treat its own enquiries 
or those conducted for another authority in its own country. 
ARTICLE 6 
18. This requires the requested authority to carry out 
control enquiries on behalf of another Member State. This 
may include validation and verification of intra-Community 
transactions on a sampling basis, to ensure that goods for 
which exemption or suspension of tax is claimed are duly 
transferred to the territory of another Member State and 
brought under fiscal control in that Member State. 
ARTICLE 7 
19. This is a new provision which gives the Member States 
the possibility of organising coordinated tax examinations, 
each on its own territory. Such a provision is particularly 
important in view of the increasing integration of European 
markets and the tendency for a large proportion of intra-
Community trade to be conducted by a relatively small number 
of linked or closely related groups of companies. The 
systematic control of such companies requires a global 
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approach going beyond national boundaries, and this Article 
encourages the development of such an approach. 
ARTICLE 8 
20. This is a standard provision covering the transmission 
of official documents or attestations to an applicant 
authority in respect of indirect tax matters. 
ARTICLE 9 
21. This, again, is a standard provision relating to the 
service of documents. There could be difficulties for 
Member States in serving documents (for example in the case 
of a tax claim against a non-resident or a resident who has 
moved to another Member State) and this Article provides for 
administrative co-operation in such cases. The increased 
mobility of taxpayers in the internal market will render 
such a provision more important in the future. Although 
assistance in the servicing of documents may be requested at 
all phases of indirect tax proceedings prior to judicial 
proceedings, assistance will in practice relate mainly to 
the assessment phase. The aim is to ensure as far as 
possible that documents such as notices of assessment or 
reminders actually reach the taxable person, in order to 
avoid enforcement steps being taken, or penalties imposed, 
against a person who is genuinely ignorant of a tax claim or 
liability. 
ARTICLE 10 
22. Once again this is a standard provision providing for 
transmission on request of information relating to indirect 
tax operations which are suspected of being fraudulent. It 
covers in particular the transmission of reports or 
documents from the archives of the requested authority. 
TITLE III 
Automatic exchange of information. 
ARTICLE 11 
23. Article 11 deals with the automatic exchange of 
information between the Member States. Although not used at 
present this type of information exchange could be of real 
value in the future, as co-operation between fiscal 
administrations develops and expands. Accordingly, the 
methods of co-operation to be employed under this Article 
are left to be defined in the context of the meetings of 
representatives of Member States to be organised under 
Article 19. 
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TITLE IV 
Spontaneous assistance 
ARTICLE 12 
24. This Article lays a general obligation on the Member 
States to provide spontaneous assistance to each other. 
This type of assistance is supplied without either previous 
request from another Member State or prior agreement on 
items to be transmitted automatically. Spontaneous 
information exchanges are likely to prove particularly 
useful in fraud control because they generally concern data 
specifically detected and selected by an indirect tax 
official of the sending Member State during a domestic audit 
or investigation. 
ARTICLE 13 
25. This Article sets out various instances where the 
competent authorities of the Member States exchange 
information, without prior request, in the general field of 
tax control and compliance. As with Article 7, these 
provisions have particular relevance to the control of 
taxable activities by closely related trading groups. 
The second paragraph permits the Member States, meeting 
under the procedures laid down in Article 19, to add new 
categories to the list of cases where spontaneous exchange 
of information is appropriate. 
As the efficiency of spontaneous exchanges depends almost 
exclusively on the initiative of the supplying State, it is 
important that the competent authorities of the latter 
should take the necessary administrative steps to ensure 
that information likely to be of interest to another State 
is brought to its own attention. A requirement to this 
effect is laid down in the third paragraph of this Article. 
ARTICLE 14 
26. This Article is a parallel provision to Article 13, in 
the fraud field. Spontaneous transmission of information is 
to take place immediately and, given the wide scope of 
potential fraudulent activity, no attempt is made to limit 
the transmission to particular categories; all information 
of use in connection with fraudulent operations is to be 
transmitted. 
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TITLE V 
Conditions governing assistance 
ARTICLE 15 
27. This Article establishes the general principle that the 
competent authorities of the Member States should take steps 
to ensure that their obligations to furnish information are 
carried out swiftly. Provision is made for the laying down 
of more precise time limits for particular categories of 
information, in accordance with the procedures of Article 
19. Requested information sent under the provisions of 
Articles 5 to 10 is subject in any case to a maximum time 
limit of three months unless the applicant authority itself 
proposes a longer period. Three months is the time limit to 
which Member States felt able to commit themselves during 
earlier discussions on administrative co-operation. The 
second paragraph requires a competent authority to keep its 
interlocutor informed if any obstacles arise which prevent 
it from furnishing the requested information on time. 
Obstacles in this context clearly mean obstacles beyond the 
control of the authority in question. 
ARTICLE 16 
28. In this Article, rules are laid down governing direct 
collaboration between the officials of Member States. In 
the first instance the Article envisages such contact taking 
place between duly authorized officials of the applicant 
authority and the requested authority at the offices of the 
latter. The official from the applicant authority is to be 
given full access to whatever documentation the staff of the 
requested authority have available to them. 
29. The second paragraph takes the process of direct 
collaboration a stage further by permitting officials from 
the applicant authority to be present, by agreement, at a 
specific tax examination in the requested Member State. 
The justification for this further stage of collaboration 
must always be both practical and specific. It is 
understood that this extended form of assistance should not 
be asked for unless the competent authority of the applicant 
state is convinced that the examination in another Member 
State will contribute substantially to the solution of a 
domestic indirect tax problem. This procedure is a logical 
extension of the provisions for coordinated tax examinations 
in Article 7. 
30. Paragraphs 2 and 3 of this Article taken together make 
it clear that the decision as to whether representatives of 
the applicant authority should be allowed to be present or 
not is taken by the requested authority. However, it should 
be noted that the fact that the requested authority has the 
decisive role in this respect does not in any way restrict 
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the obligation on that authority to furnish information 
requested under any other Article of this proposed 
Regulation. 
31. If the request is approved the requested authority is 
called upon in paragraph 3 to indicate the time and place of 
the examination and any other relevant particulars, such as 
the official responsible for the examination and any 
specific conditions stipulated for its conduct. All 
decisions on how the examination is to be carried out have 
to be taken by the official of the requested authority in 
charge of the examination. There is no question of any 
exercise of authority in the strict sense of the word by the 
official of the applicant authority, but at the discretion 
of the requested authority he or she may be permitted to co­
operate actively. 
32. The final paragraph provides that the detailed 
application of this Article shall be discussed and if 
necessary determined in the context of the meetings to be 
organised under Article 19. 
ARTICLE 17 
33. This Article lays down standard provisions regarding 
the confidentiality of the information exchanged as part of 
administrative co-operation. The rules broadly define two 
categories of access: 
- firstly, those persons directly involved in the ascessment 
or administrative control of indirect tax. This category-
is specifically extended to include appropriate officials 
of the Community institutions, in keeping with parallel 
provisions made in the customs field (Reg. 1468/81, 
paragraph 19). 
- secondly, persons who are directly involved in judicial or 
administrative proceedings involving sanctions relating to 
indirect tax assessment. 
34. Paragraph 2 permits a Member State which for domestic 
purposes operates narrower limits than those indicated above 
to insist that an applicant authority operates the same 
narrower limits in respect of information supplied by it. 
Paragraph 3 goes in the opposite direction by permitting the 
applicant authority to allow wider access to the information 
in question, subject to the consent of the requested 
authority, if such wider access is available in the 
requested Member State. Paragraph 4 is a standard provision 
which allows one Member State to transmit information 
received from another Member State to a third Member State, 
subject to the consent of the Member State which provided 
the information. 
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ARTICLE 18 
35. The first paragraph contains a standard provision 
limiting the obligation to provide co-operation where 
considerations of public policy ("ordre public") of the 
State itself are concerned. This is very much a fall-back 
provision which will not be invoked in most normal 
circumstances. 
36. When assistance is refused, the Member State in 
question is required under the provisions of the second 
paragraph to give its reasons. 
TITLE VI 
Consultation and Co-ordination Procedures 
ARTICLE 19 
37. This Article contains the nub of the organizational 
procedures envisaged in connection with the new type of 
administrative co-operation. While the basis of this co­
operation remains essentially bilateral, between individual 
Member States, the introduction of co-operation in the 
fields of validation and verification of day-to-day control 
procedures implies the need for a central forum in which 
practical problems of general concern can be discussed and 
in which standard operating procedures can be agreed. It is 
the aim of the first paragraph of this Article to provide 
such a central forum. The text draws on the experience 
gained in the customs field (Regulation 1468/81) but is 
specifically orientated towards the needs of indirect tax 
control in the post-1992 situation. 
38. Paragraph 2 provides for Member States to continue to 
communicate directly with each other on matters of bilateral 
interest where no wider need for consultation arises. This 
is a standard provision, taken from the existing Directive 
on tax co-operation (77/799/EEC). 
39. Paragraph 3 is a provision, based on Regulation 
1468/81, which requires Member States to ensure that 
domestic co-ordination between the different national 
authorities concerned is adequate, so that external co­
operation with other Member States can operate smoothly. 
40. Paragraph 4 envisages a process of constant monitoring, 
in which the Member States and the Commission jointly 
participate, to assess the effectiveness of the co-operation 
procedures which have been set up under the provisions of 
paragraph 1. The aim is to improve and refine the co­
operation procedures on an ongoing basis and, where 
appropriate, to incorporate these improvements in 
administrative rules or procedures to be applied by common 
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agreement. The pooling of experience concerning new means 
of tax avoidance or evasion is one of the important aspects 
of this process. 
41. Finally, paragraph 5 lays down a specific task for the 
Commission in disseminating information provided to it by 
individual Member States or other reliable sources and 
likely to be of general interest in ensuring compliance with 
and proper control of any indirect tax measures. This is a 
provision drawn from experience in the customs area 
(Regulation 1468/81). Taken together with paragraphs 2 and 
4 it provides a broad outline of the respective roles to be 
played in this field by individual Member States, by the 
Member States and the Commission jointly, and by the 
Commission specifically. 
TITLE VII 
Final Provisions 
ARTICLE 20 
42. Paragraph 1 is a standard provision requiring Member 
States to keep the Commission informed of their 
administrative co-operation arrangements in indirect tax 
matters with third countries. 
43. Paragraph 2 is once again a standard provision governing 
the problem of costs. The general rule, as in previous 
Community legislation on this subject, is that each Member 
State shall bear the costs arising from its provision of 
administrative co-operation, except in respect of fees paid 
to experts in certain circumstances. Article 19(1) provides 
a forum for resolving any disputes which may arise in 
connection with this subject. 
44. The third paragraph is a necessary provision which 
enables Member States, wherever feasible, to use computer 
technology in the exchange of information or documents 
provided for under this proposal. 
ARTICLE 21 
45. The first paragraph requires the Member States to keep 
the Commission informed of any national laws which they 
subsequently adopt in the areas covered by this proposal. 
The second paragraph is a standard provision designed to 
ensure that the present proposal does not limit other 
possible avenues of co-operation. When Member States are 
bound both by the obligations of the present proposal and by 
obligations imposed by other instruments, or arrangements in 
this field, the most effective instrument can be used m any 
particular situation. The third paragraph is designed to 
ensure that existing rules applicable in the Member States 
concerning mutual assistance in criminal matters are not 
affected by the provisions of this proposal. 
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ARTICLE 22 
46. The present proposal incorporates and expands on the 
provisions of Directive 79/1070/EEC. In addition it extends 
administrative co-operation to the field of excise duties 
and thus provides a comprehensive umbrella instrument 
covering all requirements for co-operation in indirect tax 
matters. In these circumstances Directive 79/1070/EEC is 
redundant and must be repealed to avoid confusion or legal 
uncertainty. 
ARTICLE 23 
47. This Article provides for the present proposal to come 
into operation on 1 January 1992, one year before the date 
laid down by Articles 8a and 100a of the Treaty for 
eliminating fiscal frontiers and for establishing the 
internal market. There is no technical reason why the 
Member States should not implement this proposal in advance 
of other measures forming part of the fiscal approximation 
package and experience gained in its operation in the 
intervening year will enable the competent authorities of 
the Member States to face the ending of border-related 
controls on 31 December 1992 with greater confidence than 
would otherwise be the case. In particular, the intervening 
year should enable the practical control procedures 
envisaged under Article 19(1) to be agreed and implemented 
while the support provided by border controls is still 
available. 
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Proposal for a 
COUNCIL REGULATION (EEC) 
concerning administrative cooperation in the field of 
indirect taxation 
THE COUNCIL OF THE EUROPEAN COMMUNITIES» 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Article 100a thereof, 
Having regard to the proposal from the Commission, 
In cooperation with the European Parliament(1), 
Having regard to the opinion of the Economic and Social 
Committee(2), 
Whereas the establishment of the internal market in accordance 
with Article 8a of the Treaty requires the creation of an area 
without internal frontiers in which the free movement of goods, 
persons, services and capital is ensured; whereas the free 
movement of goods, persons and services requires, in particular, 
the elimination of customs-related controls within the 
Community ; 
Whereas in order to give full effect to the abolition of 
frontier controls while avoiding fiscal revenue losses for 
Member States, the fiscal harmonisation measures taken for 
completion of the internal market and for the transitional 
period require the establishment of a common system of 
administrative cooperation between the competent authorities of 
the Member States; 
(1)0J No 
(2)OJ No 
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Whereas the provisions of this Regulation which provide for this 
cooperation system are designed to permit the abolition of 
frontier controls in accordance with the aims set out in Article 
8a of the Treaty, and not to harmonise fiscal provisions in the 
sense of Article 100a(2); whereas it is moreover necessary 
that the transitional taxation system should be effectively 
established without risks of fraud which might lead to distortions 
Of compet i t i on; 
Whereas Member States nevertheless have a continuing need to 
exercise controls over intra-Community traffic in goods and 
services similar to those which they exercise over domestic 
transactions affected by indirect tax obligations; whereas lack 
of such controls can lead to tax evasion and tax avoidance 
extending across the frontiers of Member States with consequent 
budgetary losses, violation of the principles of fair taxation 
and distortion of conditions of competition between Member 
States ; 
Whereas collaboration between indirect tax administrations 
within the Community, and between such administrations and the 
Commission, should therefore be strengthened in accordance with 
common principles and rules to ensure the establishment and the 
functioning of the internal market; 
Whereas in making the appropriate arrangements for carrying out 
administrative cooperation the Member States shall pay 
particular attention to the need for validation and verification 
of intra-Community transactions in goods and services, given 
that the kinds of controls formerly exercised over such 
transactions are no longer applicable; 
Whereas the Member States should, on request, exchange 
information concerning particular cases; whereas the Member State so 
requested should make the necessary enquiries to obtain such 
information; 
Whereas the Member States should exchange, even without any 
request, any information which appears relevant for the control 
of indirect taxes, in particular where such taxes have been or 
may be evaded or avoided for any reason whatever; 
Whereas it is important that officials of the indirect tax 
administration of one Member State be allowed to be present in 
the territory of another Member State if both the States 
concerned consider it desirable; 
Whereas care must be taken to ensure that information provided 
in the course of such collaboration is not disclosed to 
unauthorized persons, so that the basic rights of citizens and 
enterprises are safeguarded; whereas it is therefore necessary 
that the authority receiving such information should not use it, 
without the authorization of the authority supplying it, other 
than for the purposes of taxation or to facilitate legal 
proceedings for failure to observe the tax laws of the Member 
States concerned; whereas it is also necessary that the receiving 
authority affords the information the same degree of 
confidentiality which it enjoyed in the Member State which provided 
it. if the latter so requires; 
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Whereas a Member State which is called upon to carry out 
enquiries or to provide information shall have the right to 
refuse to do so where its laws prevent its indirect tax 
administration from carrying out such enquiries or from 
collecting or using such information for its own purposes, or 
where the provision of such information would be contrary to 
public policy; 
Whereas collaboration between the Member States and the 
Commission is necessary for the permanent study of cooperation 
procedures and the pooling of experience in the fields 
considered, with the aims of improving those procedures and 
preparing appropriate Community rules, and of detecting any 
activity contrary to indirect tax laws. 
HAS ADOPTED THIS REGULATION ; 
Article 1 
This Regulation lays down the ways in which the administrative 
authorities responsible in the Member States for the application 
of the law on indirect tax matters shall cooperate with those in 
the other Member States and with the Commission in order to 
ensure compliance with the law and a correct assessment of the 
taxes in question. 
Article 2 
1. For the purposes of this Regulation : 
- the "law on indirect tax matters" means all provisions 
applicable in the laws of the Member States and all Community 
provisions relating to value added tax and to excise duties as 
defined in Article 5(1). 
- "applicant authority" means the competent authority of a 
Member State which makes a request for assistance, 
- "requested authority" means the competent authority of a 
Member State to which a request for assistance is made. 
2. Each Member State shall communicate to the other Member 
States and to the Commission a list of the competent authorities 
whtch are appointed to act as correspondents for the purposes o 
aoDlving this Regulation. In addition, each Member State shall 
«SnîXïte a central office with principal responsibility for 
liaison with o?her Member States in the field of administrative 
co-operation. 
T« fhîc Peculation "competent authorities" means those 
authoAtie^appoin^d to "act as correspondents under the f xrst 
subparagraph. 
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TITLE I 
Administrative cooperation - general provisions 
Article 3 
The competent authorities of the Member States shall cooperate 
with each other and with the Commission, to the fullest extent 
possible, in ensuring that national and Community provisions 
relating to indirect taxes are complied with and properly 
controlled. 
In particular the competent authorities shall exchange between 
themselves any information that is relevant to the assessment 
and collection of indirect taxes. They shall also communicate 
any specific or general information to the Commission when this 
may be of interest at Community level. 
Article 4 
The obligation to provide assistance laid down by this 
Regulation shall not cover the provision of information or 
documents obtained by the administrative authorities referred to 
in Article 1 at the request of the judicial authority. 
However, in the case of an application for assistance, such 
information or documents shall be provided in all cases where 
the judicial authority, to which reference must be made, gives 
its consent. 
TITLE II 
Assistance on request 
Article 5 
1. At the request of the applicant authority, the requested 
authority shall communicate to it all information likely to 
enable the former to ensure compliance with the provisions laid 
down by the law on indirect tax matters with particular regard 
to: 
- value added tax, 
- excise duty on manufactured tobacco products, 
- excise duty on alcoholic beverages and on the alcohol 
contained in other products, 
- excise duty on mineral oils. 
2. In order to obtain this information, the requested authority 
or the administrative authority which it has addressed shall 
- 19 -
proceed as though it were acting on its own account or at the 
request of another authority in its own country. 
Article 6 
At the request of the applicant authority, the requested 
authority shall carry out appropriate enquiries or arrange for 
such enquiries to be carried out to enable it to supply the 
necessary information within the definition of Article 3. 
Article 7 
1. At the request of an applicant authority, two or more of the 
administrative authorities referred to in Article 2 shall 
consult together for the purposes of determining cases and 
procedures for co-ordinated tax examinations. Each authority 
involved shall decide whether or not it wishes to participate in 
a particular co-ordinated tax examination. 
2. For the purposes of this Regu lat i on, a "co-ordinated tax 
examination" means an arrangement between two or more authorities 
to examine, each in its own territory, the indirect tax affairs 
of a person or persons in which they have a common or related 
interest, with a view to exchanging any relevant information 
which they so obtain. 
Article 8 
At the request of the applicant authority, the requested 
authority shall supply to it any attestation, document or 
official copy of a document which it has or which it obtains in 
the manner referred to in Article 5 (2) and which relates to 
operations covered by the law on indirect tax matters. 
Article 9 
1. At the request of the applicant authority, the requested 
authority shall, while observing the rules in force in the 
Member State in which it is situated, notify any person or have 
that person notified of all acts or decisions which 
emanate from the administrative authorities and concern the 
application of the law on indirect tax matters. 
2. Requests for notification, mentioning the subject of the act 
or decision to be communicated, shall be accompanied by a 
translation in the official language or one of the official 
languages of the Member State in which the requested authority 
is situated, without prejudice to the latter's right to waive 
such a translation. 
Article 10 
At the request of the applicant authority, the requested 
authority shall supply to it any information in its possession 
- 20 -
or which it can obtain as prescribed in Article 5(2), in 
particular in the form of reports and other documents or 
official copies of or extracts from such reports or documents, 
concerning operations detected or planned which are or appear to 
the applicant authority to be contrary to the law on indirect 
tax matters. 
However, such communication shall be in the form of original 
documents and other material only if the provisions in force in the 
Member State in which the requested authority has its 
headquarters do not preclude this. 
TITLE III 
Automatic exchange of information 
Article 11 
For categories of cases which shall be determined under the 
procedures laid down in Article 19 the competent authorities of 
the Member States shall regularly exchange the information 
referred to in Article 3 without prior request. 
TITLE IV 
Spontaneous assistance 
Article 12 
The competent authorities of each Member State shall, as laid 
down in Articles 13 and 14, provide assistance to the competent 
authorities of the other Member States without prior request of 
the latter. 
Article 13 
1. Where they consider it relevant in connection with 
compliance with the law on indirect tax matters, the competent 
authorities of a Member State shall without prior request 
forward the information referred to in Article 3, of which it 
has knowledge, to the competent authority of any other Member 
State concerned, when: 
(a) the competent authority of the one Member State has grounds 
for supposing that there may be a loss of indirect tax in 
the other Member State; 
(b) a person with an indirect tax liability obtains a reduction 
in or an exemption from indirect tax in the one Member State 
which would give rise to an increase in indirect tax or to 
liability to indirect tax in the other Member State; 
(c) the competent authority of a Member State has grounds for 
supposing that a saving of indirect tax resulting from 
- 21 -
artificial transfers of supplies of goods or services 
through one or more countries, particularly between closely 
related trading groups, accrues to an unentitled person; 
(d) information forwarded to the one Member State by the 
competent authority of the other Member State has enabled 
information to be obtained which may be relevant in 
assessing liability to indirect tax in the latter Member 
State. 
2. The competent authorities of the Member States may, under 
the procedures laid down in Article 19 extend the exchange of 
information provided for in paragraph 1 to cases other than 
those specified therein. 
3. The competent authorities of each Member State shall take 
such measures and implement such procedures as are necessary to 
ensure that the information referred to in paragraphs 1 and 2 
will be made available for transmission to other Member States. 
Article 14 
The competent authorities of each Member State shall immediately 
send to the competent authorities of the other Member States 
concerned all information of use in connection with operations 
which are or appear to them to be contrary to the law on indirect 
tax matters. 
TITLE V 
Conditions governing assistance 
Article 15 
1. The competent authority of a Member State which under the 
preceding articles is called upon to furnish information shall 
forward it as swiftly as possible and in any case within time 
limits to be agreed under the procedures laid down in Article 
19. Information which is provided on request shall be furnished 
within three months of the receipt of the request, unless the 
time limit is extended by the applicant authority. 
2. If a competent authority encounters obstacles in furnishing 
the information it shall forthwith inform the other authority or 
authorities concerned to this effect, indicating the nature of 
the obstacles. 
Article 16 
1. By agreement between the applicant authority and the 
requested authority and in accordance with the arrangements laid 
down by the latter, officials duly authorized by the applicant 
authority may obtain, from the offices where the administrative 
authorities of the Member State in which the requested authority 
is situated exercise their functions, information concerning the 
- 22 -
application of the law on indirect tax matters which is needed 
by the applicant authority and which is derived from 
documentation to which the staff of those offices have access. 
These officials shall be authorized to take copies of the said 
documentation. 
2. By agreement between the applicant authority and the 
requested authority the latter shall allow officials duly 
authorized by the applicant state to be present at the 
appropriate part of a tax examination in the requested Member 
State. 
3. If the request is acceded to, the requested authority shall, 
as soon as possible, notify the applicant authority about the 
time and place of the examination, the authority or official 
designated to carry out the examination and the procedures and 
conditions laid down by the requested authority for the conduct 
of the examination. All decisions with respect to the conduct 
of the tax examination shall be made by the requested authority. 
4. The details for applying the preceding provisions shall be 
discussed and, as appropriate, determined under the procedures 
laid down in Article 19. 
Article 17 
1. Any information communicated in whatever form pursuant to 
this Regulation shall be of a confidential nature. It shall be 
covered by the obligation of professional secrecy and shall 
enjoy the protection extended to like information under both the 
national law of the Member State which received it and the 
corresponding provisions applying to the Community authorities. 
In any case such information: 
- may be made available only to the persons directly involved in 
the assessment or administrative control of indirect tax or to 
persons within the Community institutions whose duties require 
that they have access to it. It may not be used for purposes 
other than those provided for in this Regulation, unless the 
authority supplying it has expressly agreed and insofar as the 
provisions in force in the Member State where the authority 
which received it is situated do not preclude such 
communication or use, 
- may, in addition, be made known in connection with judicial 
proceedings or administrative proceedings involving sanctions 
undertaken with a view to, or relating to, the making or 
reviewing of the indirect tax assessment and only to persons 
who are directly involved in such proceedings; such 
information may, however, be disclosed during public hearings 
or in judgments if the requested authority raises no 
objection, 
- shall in no circumstances be used other than for taxation 
purposes or in connection with judicial proceedings or 
administrative proceedings involving sanctions undertaken with 
- 23 -
a view to, or in relation to, making or reviewing the tax 
assessment. 
2. Paragraph 1 shall not oblige a Member State whose 
legislation lays down, for domestic purposes, narrower limits 
than those contained in the provisions of that paragraph, to 
provide information if the applicant authority does not 
undertake to respect those narrower limits. 
3. Notwithstanding paragraph 1, the competent authorities of 
the Member State providing the information shall permit it to be 
used for other purposes in the applicant State, if, under the 
legislation of the requested State, the information could be 
used in the requested State for similar purposes. 
4. Where the applicant authority considers that information 
which it has received from the requested authority is likely to 
be useful to the competent authority of a third Member State, it 
may transmit it to the latter with the agreement of the 
requested authority. 
Article 18 
1. This Regulation shall not bind the administrative 
authorities of the Member States to grant each other assistance 
where to do so would be likely to prejudice public policy of the 
State in which they are situated. 
2. Reasons shall be stated for refusal to grant assistance. 
TITLE VI 
Consultation and Co-ordination Procedures 
Article 19 
1. The Commission shall organise meetings with the 
representatives of the Member States during which: 
- the operation of the arrangements for administrative co­
operation provided for in this Regulation shall be examined in 
general terms, with particular regard to the development of 
standard practices for the validation and verification of 
intra-Community transactions, 
- common practical procedures for forwarding the information 
referred to in Article 3 shall be laid dowr., taking due 
account of any agreements made under Article II, 
- the information sent to the Commission purs .<m'' ~ - V « icle 3 
shrill be examined with a view tc drawj i,, ti - relevant 
conc3usions, determining the measures req-"- ' >\ u ••• >t an end 
to ar y opt, cations found to be contrary to {1i * indirect 
tax raa; *:ers and, where necessary, ^.v^est ' ».c, t >iCixdments to 
24 -
existing Community provisions or the drawing up of additional 
ones, 
- cases and procedures concerning co-ordinated tax examinations 
provided for in Article 7 shall be examined and discussed. 
2. On matters of bilateral interest, the competent authorities 
of the Member States may communicate directly with each other. 
The competent authorities of the Member States may, by mutual 
agreement, permit authorities designated by them to communicate 
directly with each other in specified cases or in certain 
categories of cases. 
3. For the purposes of applying this Article, Member States 
shall take all the necessary steps to: 
(a) ensure sound internal coordination between the competent 
authorities referred to in Article 1; 
(b) establish direct cooperation between the authorities 
specially empowered for the purposes of such coordination; 
(c) make suitable arrangements for ensuring the smooth operation 
of the arrangements for administrative cooperation provided 
for in this Regulation, including the nomination of a 
central office as required under Article 2(2). 
4. The Member States shall, together with the Commission, 
constantly monitor the cooperation procedure provided for in 
this Article and shall pool their experience, especially 
concerning new means or methods of tax avoidance or evasion with 
a view to improving such cooperation and, where appropriate, 
drawing up a body of rules as described in paragraph 1. 
5. The Commission shall communicate to the competent 
authorities of each Member State, as soon as it is available, 
any information which it receives under the provisions of 
Article 3, or any other relevant information which it is able to 
supply. 
TITLE VII 
Final Provisions 
Article 20 
1. Member States shall advise the Commission of any 
arrangements for administrative co-operation in the field of 
indirect taxation carried out with third countries. 
2. Member States shall waive all claims for the reimbursement 
of expenses incurred pursuant to this Regulation except, as 
appropriate, in respect of fees paid to experts. 
3. For the purposes of this Regulation "document" includes 
information held in or transmitted by computerised systems. 
- 25 -
Article 21 
1. Member States shall communicate to the Commission the texts 
of any provisions of national law which they subsequently adopt 
in the field covered by this Regulation. 
2. The arrangements provided for by this Regulation do not 
limit, nor are they limited by, those contained in other 
agreements or instruments which relate to co-operation in tax 
matters. 
3. This Regulation shall not affect the application in the 
Member States of the rules on mutual assistance in criminal 
matters. 
Article 22 
Council Directive 79/1070/EEC1 is hereby repealed. 
Article 23 
This Regulation shall enter into force on the third day 
following that of its publication in the Official Journal of the 
European Communities. 
It shall apply from 1 January 1992. 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels, For the Council 
1 OJ Ho I 33f* *7.12.t979# p* 8 

ISSN 0254-1475 
COM (90) 183 final 
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