Opinion of the Economic and Social Committee on the 'Proposal for a European Parliament and Council Directive amending Council Directive 76/308/EEC on mutual assistance for the recovery of claims resulting from operations forming part of the system of financing the European Agricultural Guidance and Guarantee Fund, and of agricultural levies and customs duties and in respect of value added tax and certain excise duties'
Date: 1999-01-27
Institutions: European Economic and Social Committee
Subjects: EAGGF, ESC opinion, VAT, agricultural levy, customs duties, financial instrument

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Official Journal of the European Communities

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2.5.2. Without prejudice to regional policy measures
at Community level and in accordance with the subsidi-
arity principle, the operation of the internal energy
market should ensure that the Member States are able
to establish public service obligations to safeguard final
supply to all citizens on the same terms as regards
quality and price.

2.5.3.
Projects involving trans-European energy net-
works should be particularly careful not to damage the
environment. This factor is not expressly addressed in
the current proposal. The Committee would like to
see a more explicit reference to the importance of
environmental impact assessment. At all events, respect
for the environment should be a major criterion in the
selection of projects, both now and in the future.

Brussels, 27 January 1999.

3. Specific comments

Add the following texts to the preamble:

3.1.
‘Whereas the next review of this list shall give
special attention to integrating the specific needs of the
outlying and most remote regions of the European Union
so as to ensure that the technical conditions exist for
safeguarding final supply to the populace’.

3.2.
‘Whereas every new project must meet
strategic environmental impact assessment criteria’.

the

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

Opinion of the Economic and Social Committee on the ‘Proposal for a European Parliament
and Council Directive amending Council Directive 76/308/EEC on mutual assistance for the
recovery of claims resulting from operations forming part of the system of financing the
European Agricultural Guidance and Guarantee Fund, and of agricultural levies and customs
duties and in respect of value added tax and certain excise duties’ (1)

(1999/C 101/08)

On 28 July 1998 the Council decided to consult the Economic and Social Committee, under
Article 100a of the Treaty establishing the European Community, on the above-mentioned
proposal.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which
was responsible for preparing the Committee’s work on the subject, adopted its opinion on
15 December 1998. The rapporteur was Mr Bento Gonçalves.

At its 360th plenary session (meeting of 27 January 1999), the Economic and Social Committee
adopted the following opinion by 119 votes to one with four abstentions.

1.

Introduction

1.1. Scope of the proposal

The main purpose of the Commission communication
and the accompanying proposal is to amend, inter alia,

Council Directives 76/308/EEC and 79/1071/EEC in
order to improve the procedures for mutual assistance
between Member States with regard to the recovery of
claims resulting from operations forming part of the
system of financing the EAGGF and relating to the
following:

— agricultural levies and customs duties

(1) OJ C 269, 28.8.1998, p. 16.

— value added tax (VAT)

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— import and export duties

3. General comments

— certain excise duties

— taxes on income and capital

— costs and interest incidental to the recovery of these

claims.

1.2. Objective and legal basis

The Commission considers that its proposal is important
for safeguarding the normal functioning of the internal
market in accordance with Article 7a of the Treaty and
for meeting the threat to the financial interests of the
Community and the Member States posed by the
non-fulfilment of fiscal obligations and the steady rise
in fraud. The legal basis is Treaty Article 100a.

2. Gist of the Commission communication and pro-

posal

2.1.
The Commission refers to the difficulties encoun-
tered in implementing the procedures on mutual assist-
ance between Member States with regard to the recovery
of claims. It lists some of these difficulties, the most
important of which are:

— the difficulty of tracing debtors in the EU;

— appreciable differences between Member States’

recovery powers;

— lack of legal equity in the treatment of inter-Member

State claims;

— slow, complicated and poorly understood mutual

assistance arrangements;

— no administrative priority given to inter-Member

State claims.

2.1.1.
These procedures were conceived for the recov-
ery of agricultural levies and customs duties as albeit
limited sources of Community revenue. Problems started
to arise when essentially national taxes such as VAT
and excise duties were included.

The procedures were introduced in 1976 and
2.2.
have been amended on four occasions. One of these
occasions was in 1990, but the 1990 amendments were
never adopted and are now being replaced by the present
proposal.

2.3. Once again, piecemeal solutions are being pro-
posed in an attempt to achieve the Commission’s and
Council’s objective of making the recovery of claims
more efficient.

3.1.
The Commission justifies its proposal with the
aid of data obtained from a detailed analysis of trends
since the 1970s. There are a growing number of signs
which suggest that fraudsters are increasingly exploiting
shortcomings in the system by perfecting their tech-
niques, thereby continually increasing the volume of
fraud. It is also acknowledged that only 3-5 % of debts
are recovered from fraudsters.

3.1.1.
In addition, cooperation between national
administrations in the field of mutual assistance is
inefficient or lacking. This means that many claims are
forfeited. Others cannot be recovered because the firms
owing the money do not have the assets, while firms’
short lives also result in a loss of fiscal revenue. The
current system is unsustainable because of the tax
injustices, distortions of competition and iniquities
which it causes between Member States and between
businesses.

3.1.1.1.
The Commission proposes that excessively
old claims should be excluded from the directive’s field
of application.

The Committee understands the Commission’s motives,
but considers that this possibility is unacceptable in
terms of fiscal justice because it would reward fraudsters
while penalizing businessmen who meet their obli-
gations. The tax revenue of some Member States would
also suffer at the expense of others.

3.1.1.2. National governments must show greater
determination to recover claims more effectively and
hence to combat fraud.

3.2.
The Commission points out that the recovery of
VAT and direct taxation are the main concerns at the
moment because of the large sums involved.

3.3. Ways of improving the system

3.3.1.
the system more effective:

A number of strategies are listed for making

— Integrated strategy for improving the functioning of
agreements on the recovery of claims and measures
for updating the legal framework and its application.

— Implementation of administrative measures under
the FISCALIS programme, especially in relation to
VAT and excise duties.

— Continuing vocational training for administrative
staff could help to improve the situation. However,
there may be legitimate doubts as to the effectiveness

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of this training, bearing in mind the adverse develop-
ments in this field. One may also ask whether it is
not more a question at the moment of taking political
decisions at the highest level.

In the Committee’s view, this amendment will not help
to improve the combating of fraud. What is needed is a
legal framework for eliminating obstacles to the supply
of information whenever this is necessary to combat
fraud.

3.4. Delay in implementing the definitive VAT regime

— Another legitimate question concerns the reasons
behind the failure to set up the regime which was to
replace the 1993 transitional VAT regime in the
course of 1996.

— The definitive regime, which was scheduled to enter
into force in 1996, was based on the principle of
assessment in the country of origin, which could be
one way of tackling the present problem more
adequately.

4. Specific comments

4.1. Article 1

The material which took up twenty-five articles in the
previous proposal has now been condensed into four.

4.1.5.
The Committee agrees in principle with the
amendment in point 6 of the proposal. However, the
date of receipt of the applicant authority’s request by
the requested authority must be respected so that
enforcement of the claim is not prejudiced by the
requested authority.

4.1.6.
The Committee endorses the deletion of
Article 14, as proposed in point 12 of the proposal, as
this will improve mutual assistance procedures for the
recovery of outstanding claims.

4.1.7.
The proposed amendments to Articles 22 and
25 (points 15 and 16 of the proposal) seek to improve
mutual assistance procedures between Member States
and information on the progress of cases, enabling the
Commission to provide the Parliament and the Council
with details of the results achieved.

The following amendments have been made:

4.2. Articles 2 and 3

4.1.1.
The title of Council Directive 76/308/EEC of
15 March 1976 has been changed to read: ‘Council
Directive 76/308/EEC of 15 March 1976 on mutual
assistance for the recovery of claims relating to certain
levies, duties, taxes and other measures’.

4.1.2.

The gist of the proposal is as follows:

‘Import duties’:

4.1.2.1.
the meaning has been
widened to include the customs duties of third countries
and the agricultural levies and other import charges laid
down within the framework of the common agricultural
policy or in specific arrangements resulting from the
processing of agricultural products (first indent of
Article 1(3) of the proposal).

4.1.2.2.
indent of Article 1(3) of the proposal).

Idem in relation to ‘export duties’ (second

4.1.2.3.
of Article 1(3) of the proposal).

‘Taxes on income and capital’ (third indent

4.1.3.
Point 4(a) extends the information which can
be supplied to the applicant Member States to allow
them to identify the persons against whom the claims
are being made (amendment to Article 4(2) of Directive
76/308/EEC).

Point 4(b) deletes paragraph 3, point (b) of
4.1.4.
Article 4 of Directive 76/308/EEC, thereby depriving
the requested Member State of the possibility of not
supplying the applicant authority with information
about the debtor which would disclose an industrial,
to
commercial or professional secret
Article 4(3) of Directive 76/308/EEC).

(amendment

These articles deal with the laws, regulations and
administrative provisions which the Member States will
have to adopt in order to comply with the proposed
directive and the date of the directive’s entry into force.
They do not call for any comment on the part of the
Committee.

5. Conclusions

5.1.
The Committee endorses the proposal as being
consistent with the recommendations made in its opin-
ions on general taxation in the EU, which anticipated
most of the problems which have arisen in taxation and
unresolved fraud cases (1).

A whole range of ad hoc and transitional
5.1.1.
tax measures have served to increase fraud, seriously
distorting competition and continuing to benefit some
Member States at the expense of others.

5.1.2.
Such a trend runs counter to the guidelines and
commitments adopted at the time of the launch of the
single market, when a transitional system was set up
that was to run until 1996. Guidelines were established
for preparing the EU’s tax framework so that all

(1) OJ C 237, 12.9.1988; OJ C 82, 19.2.1996; OJ C 204,

15.7.1996; OJ C 296, 29.9.1997.

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economic operators and Member States could conduct
their business free of red tape and in a climate of
transparency and fiscal equity.

— ‘In the absence of a viable alternative, the current
“transitional” system will remain in place for several
more years.’

5.1.3.
The Committee is not convinced that the
Commission proposals will suffice to recover fraudulent
claims. The Committee considers that the root of the
problem lies in the Member States, since all the measures
for combating the effects of fraud are bound to fail as
long as Member States continue to concentrate on
recovering domestic claims. In short, the EU is entering
the 21st century with a tax system that would not even
have been appropriate in the 19th.

As the Court of Auditors states in its annual

5.2.
report concerning the financial year 1997 (1)

— ‘In the Member States the fight against fraud is
usually synonymous with an absence of an integrated
strategy ...’

— ‘ The instruments for cooperation between Member

States are not fully utilized.’

— ‘The slowness of the procedures and, sometimes,
even the ignorance of existing instruments, especially
at the level of local administrations, frequently
provide the explanation for this under-utilization.’

(1) OJ C 349, 17.11.1998.

Brussels, 27 January 1999.

In these circumstances, the Committee considers that
the problem of fraud can only be resolved by the taking
of political decisions at the highest level.

5.3.

In view of the above, and more especially:

— the Court of Auditors’ comments on the inability of
national authorities to tackle fraud effectively, and
its steady rise;

— the Court of Auditors’ statement concerning the

continuation of the transitional fiscal system;

— the EU public’s growing recognition of the political
incapacity of governments and the Community
authorities to address the problem jointly;

— the fact that the single market and monetary union,
which have already been established, will only
become effective with the establishment of the tax
pillar;

national governments must act with determination to
eradicate the social, economic and political problems
caused by this situation, thereby creating conditions in
which EU citizens and economic operators can freely
benefit from the EU in conditions of transparency and
equity.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI