EN    EN EN   
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 18.8.2009 
SEC(2009) 1121 
  
COMMISSION STAFF WORKING DOCUMENT 
 
On evaluating the Member Stat es' replies to the questionnaire relating the application of 
Council Regulation (EC) no 1798/2003 concerni ng administrative cooperation in the 
field of value added tax 
 
Accompanying the 
REPORT FROM THE COMMISSION TO  THE COUNCIL AND THE EUROPEAN 
PARLIAMENT 
 
on the application of Council Regulation (EC) no 1798/2003 concerning administrative 
cooperation in the field of value added tax  
   
[COM (2009) 428 final] 
EN 2   EN TABLE OF CONTENTS 
COMMISSION STAFF WORKING DOC UMENT "On evaluating the Member States' replies 
to the questionnaire relating the applica tion of council Regula tion (EC) no 1798/2003 
concerning administrative cooperation in  the field of value added tax". Error! Bookmark not 
defined.  
1. Introduction................................................................................................................ .. 3 
2. Analysis of the responses to the questionnaire ............................................................ 3 2.1. Decentralisation of administrative cooperation (article 3) .......................................... 3 
2.2. Interference with criminal proceedings (article 4) ....................................................... 4 
2.3. Request for information and for administrative enquiries (article 5) .......................... 4 
2.3.1. Time limit for providing information (article 8 and 9) ................................................ 5 2.3.2. Presence in administrative offices and pa rticipation to administrative enquiries 
(article 11) ................................................................................................................... .6  
2.3.3. Simultaneous controls (article 12 and 13).................................................................... 7 2.4. Request for administrative notification........................................................................ 8 2.5. Exchange of information without prior request ........................................................... 8 2.5.1. Automatic or structured automatic excha nge of information (article 17 and 18) ........ 8 
2.5.2. Spontaneous exchange of information (article 19) .................................................... 10 2.6. Storage and exchange of information specifi c to IC transactions  (article 22-27)...... 10 
2.7. Provisions concerning the special sche me for e-commerce (articles 28-34) ............. 11 
2.8. Relations with the commission (article 35)................................................................ 12 2.9. Relations with third countries (article 36).................................................................. 12 2.10. General conditions governing the exchange of information...................................... 13 3. General appreciation of the functioni ng of administrative cooperation..................... 13 
EN 3   EN 1. INTRODUCTION  
According to Article 45 of Council Regulation No. 1798/ 2003 on administrative 
cooperation in the field of VAT, the Commission shall present every three years a 
report to the European Parliament and the Council on the application of this 
Regulation.  
Since the practical use of the different in struments of administrative cooperation is 
made by the national tax authorities, evid ently this evaluation can only be done on 
the basis of substantial input from the Member State. 
Therefore, the Commission was of the opi nion that the information for making a 
comprehensive assessment of administrati ve cooperation under the new Regulation 
had to be collected by way of a questionnaire  launched to the Member States.  
The current commission staff working document analyses and summarizes the 
replies given by the Member States; it basically describes how Member States 
themselves assess the functioning of the Regulation (EC) 1798/2003.  
This document has been an important source of information for the Commission's 
report on the application of Council Re gulation 1798/2003 concer ning administrative 
cooperation in the field of VA T but it was not the only one. 
Indeed, other sources of information, like existing reports, discussions with Member 
States on a bilateral basis or during mee tings have been used when drafting the 
Commission's report in order to compleme nt the results of this questionnaire. 
2. ANALYSIS OF THE RESPONSES TO THE QUESTIONNAIRE  
25 Member States replied to the questionnai re which was sent to all of them. The 
questionnaire covered all aspects of the Regulation on VAT administrative 
cooperation in the field of VAT; the analysis  of the responses follows the structure of 
that Regulation.  
However, it must be pointed out that the quality of the replies from Member States 
was very different. While some Member States provided detailed and well argued 
responses, other formulated only very brie f replies without further explanations.  
2.1. Decentralisation of administrative cooperation (article 3)  
The competence in the framework of admini strative cooperation can  be delegated to 
different liaison departments, since the Regulation introduced the principle of 
decentralisation. Nevertheless, the prac tice of decentralisation has not been 
established in all Member States. Reasons to decentralise the administrative cooperation are efficiency, speed, quality and reliability. There seems to be a trend, 
however, that tax administrations in larger  Member States encourage decentralisation 
– or deconcentration - more than sma ller Member States. The principle of 
decentralisation is based on functionality  criteria (e.g., anti-fraud unit, customs 
services, qualification base d allocation…), territorial criteria (local / regional / 
borderline tax offices) or a mixture of both. Some Member States have decentralised 
the competence on the basis of bilateral ag reements with the neighbouring countries, 
if they considered that such decentralisat ion has added value in the taxation matters.  
The problems encountered by Member States ar e technical, such as the availability 
and accessibility of CCN-mail (lack of s ecured direct lines for auditors).  
EN 4   EN Member States consider CIRCA a reliable and useful tool for identifying contact 
points/ liaison departments in other Member  States. A few Member States reported 
difficulties in indentifying the liaison depa rtment having the appropriate competence 
for a certain request. This on the other ha nd presumes that information on CIRCA is 
constantly kept up to date. Addi ng the competencies of the liaison 
departments/contact persons to the lis t on CIRCA would be an improvement.  
Most Member States, however, follow the approach of appointing their Central 
liaison Officer (CLO) as main contact point  and all information has to pass via the 
CLO who is assigned a CCNmailbox. In ge neral, liaison departments cannot be 
contacted directly. 
Decentralisation has been beneficial in  specific areas. Member States where 
decentralisation has taken place seem to agr ee that this resulted in a better use of 
resources including human resources (speci alists) and the reduction of time frames. 
The fact that all Member States who follo wed this practice reported positive results 
could inspire other Member States to  reflect on the advantages gained. 
Conclusion:  the principle of decentralisation provided in the Regulation has been 
welcomed by the Member States who set up a decentralised system, because it leads to better use of resources and time mana gement. Improvements could be made as 
regards the identification of the contac t points in the liaison departments, the 
description of the competencies of each li aison department, and the availability and 
accessibility of CCNmail and CIRCA.  
2.2. Interference with criminal proceedings (article 4)  
The request for information could relate to (fraud) cases which are subject of 
criminal investigations or judicial proce dures. If a request is  blocked due to an 
ongoing criminal investigation, it is answered  as far as the inve stigation makes this 
possible. If the judicial au thorities do not release info rmation, then the requesting 
Member State is informed of the delay.  
A majority of the Member States have not encountered or are not aware of delays in 
the exchange of information for cases that  are subject of a criminal investigation. 
Delays in the exchange of information may arise if the national legislation restricts 
the exchange for confidentiality and secrecy reasons. Another reason is that interference with criminal proceedings  could endanger the judicial process 
(procedural errors). Consequently, delays appear to be unavoidable. 
A possibility is to exchange the informa tion spontaneously, once the judicial process 
has been finalised. 
2.3. Request for information and fo r administrative enquiries (article 5)  
For the purpose of forwarding requested in formation, the requested authority shall 
conduct an administrative enquiry
 if necessary to obtain the information 
In general, requests for information do not require an administrative enquiry, if the 
necessary information is av ailable in digital form. Su ch enquiries can cause a 
considerable delay in responding to the re quest due to manpower shortage and other 
circumstances, such as the difficulty in  obtaining the information (missing taxable 
person, criminal investigation) or the need  of an in-depth analysis of the case. 
Nevertheless, many Member States do not experience problems as concerns these inquiries. Only very few re quests are refused and such refusals should usually be 
explained in necessary detail. 
EN 5   EN Most Member States agree that the use of standard forms  contributes to an efficient 
exchange of information and avoids tran slation problems. Unif orm language used, 
clear layout, standardised questions, easier a nd faster exchange of information are the 
advantages, while frequent use of the free te xt box could be a disadvantage (as it isn't 
possible to cover all possible issu es) of using standard forms. 
There is no unanimous position whether the us e of the forms should be obligatory or 
not. There is a concern that the mandatory use of the standard form would be less 
efficient in certain circumstances (e.g. cross border actions without linguistic 
problems), because information can be gathered by more flexible and efficient means. 
The migration towards a new XML format
 is not entirely a success. Although 
Member States agreed unanimously on the improvements which contribute to the smooth functioning of mutual assistance an d exchange of information, some Member 
States also expressed their dissatisfaction and concerns which are due to technical 
reasons (e.g. the heavy system requirement s on end-users computers, incompatibility 
with version Adobe). Furthermore, the fact  that the XML format is not implemented 
yet by all Member States during 2008 led to a parallel use of Word and XML files in 
data exchange.  
Conclusion  
Required 
administrative enquiries following a request for information increase the workload 
of (local) auditors, which causes delays  in the exchange of information.  The standard forms 
contribute to more structure and clarity and to a more harmonised and coherent 
approach in the administrative cooperati on In general, it seems that although most 
Member States would advocate mandatory use of the standard forms, there are concerns that this would reduce the efficiency of c ooperation in certain cases. 
Member States complain that the XML-format is not applied by everybody. 
Nevertheless, once the "teething problems"  of the installation of the new XML-
format are dealt with and all the Member Stat es will start to use it, it will be a better 
tool for exchanging information.  
2.3.1.  Time limit for providing information (article 8 and 9) 
The requested information must be provide d as soon as possible and no later than 
three months after receipt of the request for information. All Member States declare to have a monitoring system using their intran et or other specific software in order to 
follow up the treatment of the request and it is usually the CLO that keeps an eye on 
the process. Internal deadlines are usually  set at 2 months, which leaves the CLO 
enough time to send the requested informati on to the requesting Member States. The 
bottlenecks are encountered at the lo wer tax levels (local offices). 
The reasons for not being able to meet the d eadlines are mainly of an internal nature: 
the lack of (human) resources, the workload of field teams, translation problems, the 
exchange of information not being considered  as a priority, especially in cases where 
there is no fiscal interest in the reque sted Member State. The complexity and 
cumbersome use of SCAC 383 forms, es pecially in complex carrousel fraud 
investigations, further add to this problem.  
The Regulation leaves the possibility to th e Member States to agree different time 
limits on a bilateral basis in certain sp ecial categories of cases (article 9)
. The 
majority of Member States have no or litt le experience with the application of this 
provision. Anyway, the Member States who make limited use of this provision on a 
EN 6   EN bi- or trilateral basis, have agreed on st ricter deadlines (even limited to 5 days) for 
fraud related cases and generally consider it  useful. Some Member States prefer rapid 
exchange even if the information is inaccura te while others prefer quality over speed.  
When Member States are unable to respond within the deadline, then the requesting 
Member States are rarely informed on the reasons for the failure to do so. Again the 
problem is internal for the same reasons as mentioned above. Furthermore, there are no means for a CLO to urge the responsible field office to explai n the reasons for not 
responding. However, delayed answers can cause  problems in Member States if there 
is a legal time limit for audits, if the information requested is required as soon as possible in e.g. fraud cases or when there is a time limit for taxation. Additionally, if 
there are systematic delays in replying, sta ff could be less motivated to make future 
requests and use of other tools of the Regul ation in future. Sending reminders to the 
requested Member State without real cons equences is considered an additional 
burden for the requesting administration. 
Analysis of the statistics sent by the Me mber States gave the following indications 
for 2006: 
– Late replies: 49.6% of the requests 
– Notifications of reasons of non compliance (article 10): in 5, 06% of the late 
replies. 
However the situation for 2007 appears to be improved: – Late replies: 36.2% of the requests 
– Notifications of reasons of  non compliance (article 10) : in 5, 9% of the late 
replies. 
Conclusion  
It is obvious that the delays in res ponding to requests for information and for 
informing the requesting Member States a bout the failure to m eet the deadlines, is 
due to internal factors. Th e problems must be addressed at management level in the 
Member States. Suggestions to address thes e deficiencies are for example, giving 
direct access to certain data contained in national databases, raising the awareness of 
local officials to prioritise the requests in  their planning, taking di rect contacts with 
the contact points in other Member States to solve problems, making it mandatory to 
inform the requesting Member State in case it is not possible to respond within the 
deadline and to give a new deadline to the request.  
2.3.2.  Presence in administrative offices and participation to administrative enquiries 
(article 11) 
Member States that use this instrument deem  that the presence of officials in foreign 
tax offices and their participation in admini strative enquiries is a useful tool because 
it allows a quicker conclusion of the audits  and a better exchange of information. 
Speaking directly with foreign colleagues a llows a more practical approach to the 
case and facilitates a closer relati on with other tax administrations.  
However, the statistics that Member States  need to submit annua lly show that the 
tool mentioned in article 11 is used very rarely (some Member States even never used it). The most important and recurrent  reasons for this are: language knowledge, 
budgetary reasons, lack of a national legal basis to allow partic ipation in national 
enquiries, interpretation of the article  11 that generates doubts regarding the 
EN 7   EN difference between this instrument and the multilateral control instrument mentioned 
in articles 12 and 13 (Use of article 11 as the legal base for the start of an MLC), 
practical problems linked to the identification of the competent official, and the fact that questions can be discussed and clar ified during intermediate discussions. One 
Member State considers that the benefit of this tool is unclear, when the information is already provided on the basis of an article 5-request.  
Some Member States require information to be exchanged on the basis of article 5, as 
a condition for other Member States officials to  be present in their offices. This slows 
down the article 11 procedures.  
Other Member States have specific nati onal provisions/requirements to start an 
article 11 procedure, for example: 
– evidence (suspicion) of a significant evasion; 
– the effectiveness of the reply is linked to a deadline; 
– the complexity of the case requires the pr esence of the foreign official to speed up 
the fiscal audit (the administrative enquiry); 
It was pointed out that an interpretation at  European level about the application of 
article 11 would be useful and that no furt her international agreements or domestic 
legislation would be required (which  limit the use of the instrument). 
Conclusion 
Raising the awareness of the officials to us e this instrument is needed. Developping 
the language skills could be solved at na tional level. Furthermore specific national 
conditions should not hamper the use of this instrument. The application of article 11 
appears to be a good instrument for coope ration between audito rs, especially in 
border regions.  
2.3.3.  Simultaneous controls (article 12 and 13) 
The creation of the multila teral control (MLC) platform under the subsequent 
Fiscalis 2003-2007 and Fiscalis  2013 programmes is overall  considered as a very 
good initiative that increas ed the use of the MLC t ool. The number of MLC's 
initiated in 2005 was 12, in 2006 16 and in 2007 33 (more than the double of the year 
before!). Although the Fiscalis programmes already lead to an  increase of the 
exchange of information resulting from MLC's, many Member States believe that the use of this instrument can still be further encouraged, for example by dissemination of good practices in a methodological guide, by organising small border projects 
between neighbouring countries, by training lo cal officials, creating a national and 
international network of auditors and reducing bureaucracy (shorter reports). 
Furthermore, a cultural change may need to happen for Member Stat es to take part in 
MLC's where the tax benefit lies in other Member States. 
In the majority of the Member States, th e CLO designates as competent authority one 
or more tax auditors responsible for the direct exchange of information within a 
specific MLC. The MLC coordinator particip ates only for organisational issues and 
not in all meetings of the MLC.  
Certain Member States do not delegate the competent author ity to the re sponsible tax 
auditor. All exchange of information must  pass via the MLC coor dinator, who is in 
principle also member of the CLO. Furthe rmore, the designated local tax officials 
have no possibility to send information vi a a secured mail (CCN mail is managed 
EN 8   EN within the CLO). In fact a number of Memb er States deem that the step through the 
CLO (that is the only one at national level to have the access to CCN mail) slows down the exchange and makes void the tool of MLC. 
In practice, local tax auditors seek solu tions to overcome the problem, for example 
they agree a code to exchange informa tion via ordinary mail without mentioning 
confidential data. 
Besides the lack of access to CCNmail for th e auditors involved in the MLC, other 
bottlenecks that have been pinpointed were: lack of mo tivation, time and resources, 
language knowledge, lack of experience, a nd proposed cases that appear to be too 
vaguely described. Different administrative  organisation and different interpretation 
of certain legal provisions make it difficu lt to organise combined MLC's (VAT and 
Direct Taxes).  
As concerns fraud cases, there is sti ll room for improving the cooperation and the 
communication between the MLC coordinati on and the Anti Fraud units' platform. 
The nature of Carousel fraud is such, th at a quick and flexible cooperation between 
experts in this field is essential.  
Conclusion 
The Member States recognize the added valu e of the instrument. They are satisfied 
with the set up of the MLC platform and the MLC guide. They consider that their internal procedures are flexible enough to react swiftly in cases of fraud. 
Nevertheless, at EU level it appears that  the communication between the Anti Fraud 
Unit and the MLC coordination could still be improved, eventually by adapting the 
existing MLC procedures in order to a llow for a quicker a nd less bureaucratic 
reaction in specific fr aud related cases. 
The exchange of information should always be direct between ta x auditors. The step 
through the CLO seems to slow down the pr ocedure. The MLC coordinators should 
have the possibility to communicate more quickly through a system similar to CCN 
mail. However, the functionality of co mmunication between local tax authorities 
already exists within CCN mail phase IIbis. 
2.4. Request for administrative notification 
Statistics show that this instrument is only used by a very limited number of Member 
States. The Member States confirm that this  tool is very rarely used or, in some 
cases, it is not used at all,  because the local official s rarely need  it. Another 
explanation given was the existing national legal syst em (procedural law).  
Conclusion : 
It appears that the request for administra tive notification is seldom used because 
other national procedures are used instead. 
2.5. Exchange of information without prior request 
2.5.1.  Automatic or structured automatic exc hange of information (article 17 and 18) 
Article 17 of the Regulation provides for Me mber States to exchange information 
without prior request. It specifies that  each Member State should forward 
information to any other Member State conc erned in three situations, which represent 
a very broad obligation. 
EN 9   EN Article 18, however, limits the obligation prov ided for in Article 17, stating that the 
Member States may determine by choice whether they will exchange certain categories of information without prior request. Articles 3 and 4 of Commission 
Regulation 1925/04 define the (sub) categories for which the Member States will 
exchange information in an automatic or structured automatic way.  
The replies to the questionnaire made cl ear that the Member States apply and 
understand the interaction between articles 17 and 18 in different ways. A small 
minority of the Member States participate in all categories. This leads to inconsistency in the exchange of inform ation between the Member States. Some 
Member States also fear problems when the new legal text introducing new mandatory information exchange categories will come into force (1 January 2015). 
The definition of "automatic" and "structu red automatic" exchange causes confusion 
also.  
Between Member States there ar e differences in the internal procedures to collect the 
information: depending on the category, it could be electr onically or manually. Also 
the internal sources to obtain the data can  differ from one Member State to another 
(car dealers, databases, invoices , other competent authorities).  
For the majority of Member States the received informati on is useful and of benefit 
in practice, but remarks were made that the quality of information could be better 
(forms should be filled in properly). Although the defined categories are still 
considered to be appropriate, it appears that only few Member States participate in 
the exchange of information on all cate gories listed. Member States do not 
participate, when they have no proper inte rest in the category or when they have no 
data available . The reason for not particip ating in a certain category is mainly the 
lack in those Member States of systematic collection of data and a centralized storage 
of the data. Several arguments are brought forward for not doing this: 
disproportionate effort for businesses and tax administrations, the categories do not 
exist (a Member State without  distance sales), difficulty to obtain the information, 
difficulty to transfer data or integrat e files (wrong format) in a database, the 
information is not centralized by a single se rvice or other ministries are competent 
(e.g. car registration), lack  of human resources.  
In particular regarding the information exch ange for distance selling, it is striking 
that there is hardly any exchange of inform ation. According to the statistical data for 
2007, there were only 5 (structured) automatic  exchanges of information carried out 
by 2 Member States for distance sales. 
The Member States forward the received in formation to the competent authorities or 
store the received information in databases for the risk analysis purposes or for 
consultation by the auditors.  
However, feedback
 on how the information was used (results) and if it was really 
useful is in the majority of th e Member States not compulsory. 
Conclusion:   
The automatic and structured  automatic exchange of in formation, which were new 
concepts introduced in Regulation 1798/ 2003, does seem to cause a number of 
problems. The Commission has already found out by analysing the statistics that the 
exchange of information for some categories listed in articles 3 and 4 of Regulation 
1925/2004 is seldom applied. Member States c onsider some categor ies more relevant 
than others, but not all reasons given jus tify the non-participati on in a certain sub 
EN 10   EN category1. Member States should implement efficient procedures to collect the data 
in the different categories to be exchanged. 
Most Member States have no feedback sy stem and therefore cannot say whether the 
received information is used effectively. Th ey indicated this as a weakness. It should 
be pointed out that a Fiscalis 2013 Project Gr oup reflected on a f eedback system that 
provides information on the usefulness and use made of the information exchanged. 
Another Fiscalis 2013 Project Group worked  on the improvement of the quality of 
the information exchanged. 
2.5.2.  Spontaneous exchange of information (article 19) 
The national tax officials are made aware of  the possibility to send spontaneously 
information they find useful for their co lleagues in other Member States through 
training, internal publicati ons and instructions.  
In view of half of the Member States this instrument is not sufficiently used. 
Suggestions for improvement are: 
– Member States make it obligatory for th eir local offices to send spontaneous 
information to other Member States whenev er it becomes available and it could be 
of significant importance for their counterparts. 
– Work in an established structure a nd on a well-defined topic (e.g. Eurocanet-
project)  
– The implementation of a harmonized feedback system (to motivate management 
and tax auditors).  
Auditors who collect the information for spontaneous exchange should have more 
awareness of the importance of this info rmation for other Member States and be 
more motivated. 
Conclusion: 
Greater awareness of the auditors of th e importance that spont aneously exchanged 
information has for other Member States is  an essential element for the development 
of this instrument. A feedback mechanis m and the improvement of the quality of 
information exchanged would be helpful to motivate tax auditors to increase the use 
of this instrument. Eurocanet2 is considered to be a good approach for the 
spontaneous exchange of information, becau se it creates direct contacts between 
officials specialized on a certain topi c and it exchanges rapidly well targeted 
information on fraudulent traders. In this way local staff could be motivated to put 
more attention to information that  spontaneously can be exchanged.  
2.6. Storage and exchange of information specifi c to IC transactions  (article 22-27) 
The invalidity of VAT-numbers and delays in  corrections of the data are often quoted 
as problems identified in relation to the qua lity of the information contained in the 
database. It was noted that Member States' different re gistration and deregistration 
rules (for example relating dormant trader s) causes for different quality of data. 
Member States have different views on how detailed the information available 
through VIES should be. In general, it is c onsidered that the information available 
                                                 
1 See the Commission's reply to chapter 51, ECA's Special Report 08/2007, OJ C20, 25.1.2008, 
2  Eurocanet is an informal network for rapid exchange of information relating potential missing trader 
fraud 
EN 11   EN through VIES is sufficiently detailed, but there is still room  for improvement, 
especially to avoid mismatching in the confirmation of the validity of the VAT 
identification number. Some Member States say that the reliability and the speed of 
availability should have priority to more details. Other Member States suggest more 
detailed information in the recapitulative st atements (e.g. transaction per transaction 
level) or details relating the taxpayer (e.g. insolvency, reasons for deregistration, 
dormant trader, number of VAT group next to  number of indivi dual members of the 
group) but at the same time they emphasise that the burden to obt ain this information 
should not be too big for businesses. The exte nsion of VIES to c over services as well 
is considered as positive, however, for some  Member States it will take some time to 
implement the corresponding changes to the IT system. 
Conclusion: 
The invalidity of VAT-numbers and delays in  corrections of the data are often quoted 
as problems identified in relation to the qua lity of the information contained in the 
database.  
Frequent updating, which should be done on a da ily basis, enhances the quality of the 
information contained in the database. The implementation of logical and conclusive 
IT checks before storing data ensures thei r quality. Furthermore data quality should 
in first instance be covering reliability and speediness of availability (VIES appears 
not the cover the most recent transactions)  
2.7. Provisions concerning the special sche me for e-commerce (articles 28-34) 
Overall, the Member States' experience with  the special scheme for non-established 
taxable persons (NETP) supplying electroni c services to non-taxable persons is 
positive. The number of NETP and the amount of payments is not significantly high. Only two Member States have a significant higher number of NETP's.  
However, Member States would prefer that  the application allows for an automated 
(retroactive) correction of previous declarat ions, in particular now that the number of 
traders using the application will increas e from 2015 onwards (cfr mini one stop 
shop). In the current system, adjustments can only be introduced manually.  
Furthermore, the messaging (which is currently done via CCN-mail2) from one 
Member State to another could be done au tomatically between na tional applications, 
although some Member States mentioned that  the development of such a programme 
will require a lot of resources. This would avoid manual feeding of the data into the 
application. 
The most recurrent problems, causing mism atching between de declared amount of 
VAT and the payment, are the bank transfer  charges and exchange rate differences. 
Member States had to communicate additional information to succeed with the matching. It was suggested to link an origin country code to the payment so that the 
recipient Member State- could easily iden tify the payments. Another suggestion was 
to think about alternative options for publishing the correct exchange rate and 
conversion procedures for businesses, e.g.  pop up messages, automated emails, to 
encourage compliance.  
Only a few Member States conducted aud its in the field of NETP's. Generally, 
Member States consider it quite difficult to carry out audits of NETP's. It might be a 
good idea that Member States that carri ed out successful audits share there 
experience and practices (for  example, addressing perc eived risks, identifying 
EN 12   EN compliance and revenue errors, providing confidence that remote and outside EU 
base businesses can be audited).  
Conclusion: 
There are no major problems in managing the special scheme. The current 
application needs to be update d to make automated correc tions in the declarations 
possible. Difficulties concerning matching of payments should be solved. Alternative options for publishing the correct excha nge rate and conversion procedures for 
businesses, e.g. pop up messages, automate d emails, to encourage compliance could 
be envisaged. 
As concerns audits in the fi eld of e-commerce, the necessa ry attention sh ould be paid 
to the realisation of audits, because only by controls can it be identified that businesses apply the provisions of the speci al scheme correctly. Member States could 
share their audit experience and audit practices in th e framework of NETP's.  
2.8. Relations with the commission (article 35) 
Most of the Member States have never sy stematically evaluated the functioning of 
the administrative cooperati on procedures internally.  
Where an independent body (National A udit Office or other body) audited the 
administrative cooperation procedures and i ssued a report, the Member States took 
the recommendations made into account for improving the mutual assistance and the 
exchange of information.  
As concerns the statistics
, the majority of the Member States considered that the 
statistical data as required are sufficient,  although some menti oned that the figures 
relating to sent and received requests di ffer considerably between Member States. 
Member States are more interested in th e tendencies revealed than in a simple 
arithmetical collation of stat istics or the mismatching be tween the figures relating to 
sent and received requests. Furthermore they  had no difficulties to retrieve the data. 
Some Member States expressed the need to  improve the quality of the data or the 
detail of the statistics, for example se tting ranges of delay, giving feedback on 
results, distinction between requests ma de with form SCAC2004 and made by form 
SCAC383 or a continuous cross check m echanism among Member States before 
disclosure of data to the Commission.  
Conclusion: 
The statistics are mainly considered to be a good tool  to indicate and reveal 
tendencies. The majority of the Member States  considered that the statistical data as 
required are sufficient. Furthermore they ha d no difficulties to retrieve the data. 
Some Member States proposed to improve the quality of the data or the detail of the 
statistics. 
2.9. Relations with third countries (article 36) 
The majority of the Member States had no or little experience with the exchange of 
information from third countries. Neverthele ss, the Member States considered that 
information coming from third countries co uld be very useful to facilitate tax 
assessment or fraud detection, but strict rules need to be applied (secrecy).  
As already foreseen in the provisions of th e article, exchange of information should 
be arranged through a bilate ral agreement, which permits the passing on of the 
EN 13   EN information. Not all Member States ha ve concluded tax tr eaties including VAT 
matters and thus it is not possible to pa ss on the information from third countries. 
Conclusion 
The provision of article 36 appe ars not to be applied freque ntly. The majority of the 
Member States are not opposed to make th e passing of information coming of third 
countries to other interested  Member States obligatory. 
2.10. General conditions governing th e exchange of information 
The language  is to some extent still a problem in the process of administrative 
cooperation.  
Generally, the Member States have no problem s with the exchange of information if 
it is sent in their own nati onal language or in one of th e working languages, but there 
is a preference for English. Nevertheless, even English could be a problem for the 
officials working at a local level of th e administration, because these people do not 
always have the appropriate language sk ills (e.g. during multilateral controls).  
Translation is mentioned as one of the reasons for not meeting the deadlines for 
replying and inadeqaute translation has led to losing cases in fiscal procedures. The 
language knowledge could be an obstacle fo r decentralisation or for local officials 
not to participate in a MLC. 
The use of standard forms already reduced the translation work, but the free text in 
box E of the SCAC-form remains a source of  burdensome translation (unnecessary if 
the box only contains information already found in another box).  
Only a few Member States had experienced refusals  for outgoing requests for 
assistance on the basis of the article 40 and mainly the reason was that the amount 
was not compliant with the threshold or  due to an allege d lack of a solid 
basis/justificati on of the fraud.  
In order to limit administrative costs, minimum thresholds  were laid down for 
triggering requests for assistance. The vast majority of the Member States agree that 
the thresholds are set at an  appropriate level, although so me Member States want to 
reduce the threshold in certain sectors (s econd hand trade). It was also mentioned 
that sometimes bilateral agreements with  neighbouring countries exist, which do not 
include thresholds.  
Conclusion:  
It could be best practice if all Member States agree the working language in which 
they want to communicate for CLO-purposes . Most of the Member States have a 
preference for English. The language prob lem occurs at the local level of the 
administration. Direct contac ts (telephone or CCN-mial)  asking for clarification 
could avoid burdensome translation. For th e MLC's, Member States could consider 
the use of the linguistic support tool set up under the Fiscalis programmes, as the 
support of interpreters could be helpful.  
3. GENERAL APPRECIATION OF THE FUNCTIONING OF ADMINISTRATIVE 
COOPERATION  
In their replies Member States made a number of suggestions for improving the 
functioning of administrative cooperation. Moreover,  at the end of the questionnaire 
EN 14   EN Member States were specifically asked whether they had any suggestions for 
improvements to make. 
The main suggestions are the following: 
• Direct access to data would lead to  quicker exchange of information, 
• On-line conversation through CCN-network  would be useful for simultaneous 
control purposes (conference calls, chat), 
• Closer cooperation with Customs authori ties in particular for the goods moving 
through the 4200-procedure (exempte d from taxation at import), 
• organising annual CLO meetings for the heads of CLO, to make contacts and 
cooperation easier and more efficien t (due to personal contact),  
• amend the Regulation in order to provide  for a legal framework for the project 
Eurocanet, 
• The set up of a structure at community level to coordinate and facilitate the use of 
the existing cooperation instruments.  
• better relations between th e existing discussion groups  (ATFS, SCAC, SCIT): 
more coherence of the mission attribut ed to the discussion groups and more 
regular and formal contacts between them , 
• the mandatory use of XML as unique standard, 
• Review of the SCAC 2004 form,  
• a computer system to ensure that reque sts are logged to a central record and 
statistical data could be extracte d electronically from the system, 
• harmonisation of legal terms/expressions 
• Sanctions on Member States that do not comply with the time limits to send the 
reply to a request.  
Most of these suggestions (direct access to  data, amendment of the Regulation) have 
already been discussed in the context of the Anti Tax Fraud Strategy (ATFS) expert 
group and are taken forward within the sh ort term action plan set out in the 
Commission's Communication on a coordinated strategy to improve the fight against 
VAT fraud in the EU3. Others (e.g. the mandatory us e of XML) are already dealt 
with in the Standing Committee on Ad ministrative Cooperation (SCAC).  
As regards the remaining suggestions, the Commision has the intention to provide 
Member States the opportunity to comment upon  them within the appropriate fora in 
the context of the follow up to the Commissi on's report on the application of Council 
Regulation 1798/2003 on administrative c ooperation in the field of VAT. 
                                                 
3 COM(2008)807final, 1.12.2008